2015 British Airways Annual Report PDF

British Airways Plc
Annual Report and Accounts
Year ended 31 December 2015
Company registration number: 1777777
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Contents
Officers and professional advisers
Strategic and directors reports

Strategic report
Management review
Financial review
Principal risks and uncertainties
Directors report
2
5
8
11
Directors responsibilities statement in relation to the financial statements
13
Independent auditors report
15
Group financial statements

Group consolidated income statement
Group statement of other comprehensive income
Balance sheets
Cash flow statements
Statements of changes in equity
Notes to the financial statements
Operating and financial statistics
Fleet table
Principal investments
Glossary
Subsidiary undertakings
16
17
18
19
20
21
71
72
73
74
75
British Airways Plc

Officers and professional advisers
Directors
Keith Williams
Alison Reed
Nick Swift
Ken Smart
Gavin Patterson
Garrett Copeland
Julia Simpson
Lynne Embleton
(Executive Chairman)
(Deputy Chairman)
(Chief Financial Officer)
Secretary
Andrew Fleming
Registered office
Waterside
PO Box 365
Harmondsworth
UB7 0GB
Parent company
International Consolidated Airlines Group S.A. (IAG)
El Casero, Iberia Zona Industrial n 2 (La Muoza)
Camino de La Muoza, s/n,
28042 Madrid
Spain
Independent auditor
Ernst & Young LLP
1 More London Place
London
SE1 2AF
Strategic report
The Directors present their Strategic report for the year ended 31 December 2015.
British Airways Plc (BA or the Group) is the UKs largest international scheduled airline and one of the worlds leading global premium airlines. The
Groups principal place of business is London with significant presence at Heathrow, Gatwick and London City airports. Operating one of the most
extensive international scheduled airline networks, together with its joint business agreements, codeshare and franchise partners, BA flies to more than
400 destinations worldwide. BAs vision is to be the most admired airline.
The Strategic report is presented in the following three sections:
Management review;
Financial review; and
Principal risks and uncertainties.
Management review
BA has made a pre-exceptional operating profit of 1,264 million in 2015 (2014: 975 million), which is a significant achievement, building upon the solid
foundations set in the previous year.
During 2015 BA welcomed 15 new and technologically advanced aircraft to the BA fleet, including five Boeing 787-9s.
We have focused on investing in our product where it matters most to our customers and, as well as introducing new aircraft, we also began to refresh
the first of 18 Boeing 747s, with new interiors and state of the art in-flight entertainment systems. We opened a new lounge in Singapores Changi
Airport offering the Concorde Bar for our First customers.
In 2015 we began operating new routes from Heathrow to Kuala Lumpur in Malaysia, Reykjavik in Iceland, Krakow in Poland, Bilbao in Spain, Corfu and
Kos in Greece, Olbia in Sardinia, Salzburg in Austria and Split in Croatia. From Gatwick to Seville and Valencia in Spain, Heraklion in Crete, Bodrum and
Dalaman in Turkey, Rhodes in Greece, Cagliari in Sardinia and Funchal in Madeira. From London City Airport to the Greek islands of Mykonos and
Santorini, and from Glasgow to Salzburg in Austria.
We announced that in 2016 we would begin to fly from Heathrow to Inverness, San Jose in California, Biarritz in France, Billund in Denmark, Chania and
Kalamata in Greece, Mahon in Menorca and Palermo in Italy. From Gatwick we will operate new routes to JFK (New York), San Jose in Costa Rica, Lima
in Peru, and Porto in Portugal plus we will fly from London City Airport to Bergerac in France.
On 28 January 2015, BA entered into a business transfer agreement with Avios Group (AGL) Limited (AGL) which transferred certain parts of the BA
Executive Club business, relating to the frequent flyer programme, to AGL in return for additional shares in AGL. Following the restructure, BAs
shareholding reduced from 100% of the previous AGL business to 86% of the new larger combined customer loyalty business.
To be the most admired airline

In 2016 we won both the Business and Consumer Superbrands awards for the second year running the first company ever to do so. The result also
saw BA become the first company to secure the Consumer Superbrands title three years in a row, after first securing the top spot in 2014. BA beat the
likes of Apple, Virgin Atlantic, Microsoft and Visa to the top business brand slot and Rolex, Dyson, Gillette and Mercedes-Benz to the best consumer
brand accolade.
BA also picked up a number of other awards in 2015. The Sunday Times and National Geographic named us best short-haul and long-haul airline. The
Independent awarded us the title of best European airline, while Business Traveller magazine named us best short-haul carrier with the best frequent
flyer programme and best airport lounges. The US version of the magazine named BA the best airline in Western Europe.
Invest in our product where it matters most

In 2015 our fleet was bolstered by 15 new aircraft, including Boeing 787-9s, Airbus A380s and A320s. In 2016 we will welcome 11 more Boeing 787-9
aircraft and two more Airbus A380s. We will take delivery of the first of our 18 Airbus A350s in 2018, and will be the proud owner of 42 Boeing 787s by
2021. Our A380s now fly to Los Angeles, Hong Kong, Johannesburg, Singapore, Washington, San Francisco and Miami. From 1 May 2016 BA will start
operating a daily A380 service to Vancouver.
Our 787-8s fly to Toronto, Austin, Calgary, Hyderabad, Montreal, Chengdu, Philadelphia, Seoul and Chennai, and 787-9s fly to Delhi, Abu Dhabi/Muscat
and Kuala Lumpur. These new aircraft offer our customers a more pleasant flying experience, with larger windows, more moisture in the air and a cabin
pressurised to a lower altitude, which helps to reduce jetlag.
The 787-9s feature First suites specifically designed for the aircraft to put comfort at the heart of the experience and make the very best use of the
more intimate space. Great attention to detail has also been paid to how the customer uses their suite, with each function being controlled by simple,
intuitive touch.
Strategic report continued

In response to feedback we gave customers the chance to pre-pay for gourmet meals in the World Traveller cabin. Customers can now choose from
'Taste of the Far East', 'Gourmet Dining', 'Taste of Britain', 'Great British Breakfast', 'Healthy Choice' and 'Vegetarian Kitchen', all of which can be prebooked from 30 days prior to travel, right up until 24 hours before departure, at a cost of between 15 and 18. We also gave customers in First, Club
World and World Traveller Plus the option to pre-order their main meal on all long-haul flights, and then extended it to an additional five routes, from
Heathrow to Beirut, Cairo, Baku, Tel Aviv and Amman. In 2015 we began serving customers English wine from the Bolney Estate winery in West Sussex.
Deliver for our customers

In 2015 we announced plans to fly to more than a dozen new routes in 2016, including Biarritz in France, Mahon in Menorca and Palermo in Sicily. We
also announced additional services from Heathrow and Gatwick to Krakow in Poland, Stockholm in Sweden, Split in Croatia, Berlin in Germany, Olbia in
Sardinia and Gibraltar.
We announced our busiest summer schedule ever at London City Airport for 2016, bolstered by an additional Embraer E190 aircraft to increase the
number of seats on flights to Dusseldorf by 50 per cent in 2016. Customers flying from London City will also be able to take advantage of three
additional flights a week to Nice, two to Faro, Florence, Ibiza and Angers and one extra flight a week to Quimper, Venice and Palma (Majorca),
increasing the number of seats offered to Europe by 30 per cent. Additional flights are also being added to the Isle of Man for next summer.
We listened to customer feedback and provided significantly more opportunities for our customers to book reward flights. In 2015 we guaranteed we
would offer nine million redemption seats across our entire network every year, with at least two Club World or Club Europe and four World or Euro
Traveller seats available on every BA flight. Also, we announced that for two thirds of the year, customers will be able to book using fewer Avios than
previously, as those flights are now considered off-peak.
We introduced a revised On Business scheme to help small and medium enterprises. In 2014 alone the On Business scheme saved firms 34 million on
travelling to do business face-to-face. The re-vamped programme enables travellers to choose between an immediate discount of at least five per cent
off selected flights, or On Business points that can be used towards future trips and upgrades. On Business points can be redeemed on upgrades and
reward flights for any staff member flying across the BA, American Airlines and Iberia networks.
We added films from the renowned British Film Institute, the Tate Gallery and the Victoria and Albert Museum to our in-flight entertainment system,
featuring some of the earliest known film footage from life in the UK and short films offering intimate portraits of the worlds leading artists and cultural
figures.
We also introduced a new luxury in-flight magazine for customers travelling in First.
Growing revenue with our airline partners

In 2015, following their addition to IAG, we announced that we are extending our codeshare agreement with Aer Lingus to cover all routes, including
those across the Atlantic. The extension of our partnership with Aer Lingus is great news for our customers, who now have an even greater choice of
routes, destinations and fares and more flexibility between the UK and Ireland.
Grow our lead in London

2015 saw BA operate its most extensive and ambitious summer schedule, which included five new routes from Gatwick to Mediterranean hotspots
Heraklion in Crete, Bodrum and Dalaman in Turkey, Cagliari in Sardinia and Rhodes in Greece. Greece proved so popular in 2015, that we have
announced new flights to Chania and Kalamata for 2016.
Increasing connectivity with Scotland, BA also announced a boost to services from London to Inverness, Gateway to the Highlands and Islands. A new
year-round service will start in May 2016, connecting Inverness directly with Heathrow's T5 and BA's global network, serving more than 130
destinations around the world. BA operates up to 58 return services a day between Scotland and Heathrow, London City and Gatwick airports, more
than any other airline, and the most to any other country on the airline's global network.
In 2015, BA announced it is to restart its long-haul route from Gatwick to New York, with a daily service to JFK. The service starts on 1 May 2016, and
will make BA the only airline to offer flights to New York from all three of London's main airports; Gatwick, Heathrow and London City.
Set the standard for safe, responsible aviation

Safety and security is at the heart of everything we do and we continue to run our business with the highest safety standards in mind.
In 2015 we began to develop our new state-of-the-art global training academy, offering training to BA employees and those from other airlines. Worldclass safety facilities include full-scale cabin mock-ups, door simulators, a fire-ground and full height evacuation slides, with trainers using examples of
past events from across the industry to create realistic evacuation scenarios. The academy also houses an aircraft simulation hall where our pilots train
on 18 different aircraft types. This helps us to continue to set the highest standards in flight safety and training that our customers expect from BA.

BAs Flying with Confidence course has now helped more than 50,000 customers beat their fear of flying. The popular course for nervous flyers, which
has been running for nearly 30 years, is run by experienced BA pilots and cabin crew.
The airline employed 175 apprentices in 2015 on its 14 apprenticeship schemes across the business, in professions ranging from engineering and
operations, to IT, finance and customer service. Since 2010, more than 600 students have begun apprenticeships, with many graduating to permanent
roles with the airline. More than 50 graduates joined the business in 2015, on the following schemes: Leaders for Business (general management);
Analysts; Engineering; Cargo; and Operational Research.
BAs Community Learning Centre has welcomed around 100,000 people since opening in 1999 with students attending aviation themed educational
activities that are interactive and link with the school curriculum. Programmes are offered to students in the boroughs surrounding Heathrow.
In 2015 we became part of the Kidzania educational entertainment experience in London. Our involvement gives children aged four to 14 the
opportunity to don BA style uniforms and learn about being a pilot by trying their hand in one of five realistic flight simulators. They can also
experience what it's like to be a member of cabin crew, learning the safety demonstration and serving food and drinks to the discerning customers
(their parents) in an exact replica of a BA cabin. Our staff and customers continued to successfully raise money for Flying Start, our charity partnership
with Comic Relief, with the total amount raised now standing at more than 12 million.
Be outstanding perform at our best

We know that punctuality is important to our customers, and 2015 saw 78 per cent of departures within 15 minutes of their scheduled departure time
(2014: 78 per cent of flights departed within 15 minutes of scheduled departure time). We also achieved the best yearly network Ready To Go since
2011 at 56 per cent (2014: 55 per cent) and the best Q4 performance in 15 years at 61 per cent (Q4 2014: 54 per cent). To help us achieve these
results, we introduced a number of initiatives to help us maintain punctuality, including the way we board our flights and the size of the bags we allow
customers to take into the cabin.
We also simplified the service we offer to customers at Heathrow by operating from two terminals rather than three. Flights to 20 destinations changed
terminals, and now all of the airlines Heathrow services depart from either our flagship home of Terminal 5 or the main oneworld alliance base in
Terminal 3. We successfully renovated and extended our check-in area as well as working with Heathrow Airport Limited to enhance its baggage
systems. Terminal 3 now handles a similar number of BA customers each day as the operation at Gatwick Airport.
Use technology to enhance customer engagement

We know that the way customers connect and travel with us is changing, and in 2015 we launched our app for the Apple watch. A simple swipe opens
the BA app, which was re-designed to fit the Apple Watch screen. It then displays a summary of the customer's next flight, the flight number, route,
departure time, flight status, a countdown to the departure time and the weather at the destination. Having seen the use of the app quadruple in just
four months, we introduced 136 new scanners to make them easier and faster to use at check in desks across Heathrow Terminals 3 and 5. We also
introduced Apple Pay to make it easier for customers to purchase flights, holidays and experiences with us, and celebrated five years of mobile
boarding passes. More than 28,000 of our customers now use a digital boarding pass every day.
Outlook
BA has set a solid foundation for the future, generating a 1,264 million pre-exceptional operating profit in 2015 (2014: 975 million). Going forward, BA
will target a return on capital of at least 15 per cent with an operating margin in the range of 12-15 per-cent.
Improving the customer experience will be a key feature of this business plan with plans to either replace or refurbish 99 per cent of wide-body aircraft
by 2020. Our customers will benefit from new inflight entertainment, in-seat power and the rollout of on-board WIFI across both the long and shorthaul fleet. In 2016, eleven new generation Boeing 787-9s and two Airbus A380s will be delivered bringing the respective fleets to 24 and twelve by the
end of the year. Customer service will be improved through additional cabin crew training and investment in digital to provide personalised, seamless
service that sets BA apart from the competition.
The other key focus over the next five years will be the continued drive towards greater efficiency to ensure BA can withstand competition from next
generation carriers in what is a price sensitive market. The introduction of IAG Global Business Services (IAG GBS) to provide group IT, finance and
procurement services will enable BA to reduce its central costs. IAG GBS will also enable BA to achieve improved terms with suppliers by standardising
certain product specifications across the group such as aircraft, seats and ground handling.
BA plans to grow capacity by 2-3 per-cent per annum on average, with a target of No.1 premium market share for the Atlantic Joint Business. Some of
the key markets have been strengthened with the A380 deployed on routes to Washington, San Francisco, Miami and Vancouver and the strategy of
growing to secondary cities will see San Jose (California) launched in 2016. Gatwick long-haul will see growth with the launch of routes to New York
(JFK), Costa Rica and Peru in 2016. The China 2020 strategy remains on track with plans to develop airline partnerships, strengthen commercial
presence and tailor the customer proposition. Two new crew bases will be set up in China in April 2016. Short-haul profitability continues to improve
underpinned by plans to continue reducing unit costs and the evolution of the commercial model to provide better value for money.

Financial review
The financial review provides a summary of the Groups financial results for the year ended 31 December 2015.
Summary financial performance

million
2015
2014
Better/(worse)
11,333
(10,069)
11,719
(10,744)
(3.3)%
6.3%
Operating profit before exceptional items

Exceptional items
1,264
(25)
975
29.6%
nm
Operating profit
1,239
975
27.1%
Non-operating items
Gain on deconsolidation of AGL
(144)
1,533
(116)
(24.1)%
nm
Profit before tax

Tax
2,628
(120)
859
(157)
nm
23.6%
Profit after tax
2,508
702
nm
2015
2014
Better/(worse)
174,274
142,016
81.5
170,917
138,431
81.0
2.0%
2.6%
0.5pts
5.83
7.16
4.04
6.12
7.55
4.23
(4.7)%
(5.2)%
4.5%
CONTINUING OPERATIONS
Total revenue
Total expenditure on operations before exceptional items
Available seat kilometres (ASK) (m)
Revenue passenger kilometres (RPK) (m)
Passenger load factor (%)
Passenger revenue per ASK (p)
Passenger revenue per RPK (p)
Non-fuel costs per ASK at constant currency* (p)
*Stated before exceptional items
nm = not meaningful
Revenue
million
2015
2014
Better/(worse)
10,164
547
10,452
598
(2.8)%
(8.5)%
Total traffic revenue

Other revenue
10,711
622
11,050
669
(3.1)%
(7.0)%
Total revenue
11,333
11,719
(3.3)%
Passenger revenue
Cargo revenue
Revenue for the year was 11,333 million, down 3.3 per cent over the previous year. This included a decrease in passenger revenue of 288 million, or
2.8 per cent, driven by increased competition on key North Atlantic routes and a drop in corporate customers on key oil routes as a result of the
continued fall in oil prices.
Available capacity (ASKs) increased by 2.0 per cent as a result of the addition of new aircraft which resulted in an increase in passengers carried to 43
million (2014: 42 million). A strong commercial performance has meant that this additional capacity has mostly been filled as RPKs have increased by
2.6 per cent along with a slight increase in load factor by 0.5 percentage points.
Passenger revenue per RPK ended the year 5.2 per cent lower than last year mainly as a result of falling yields on key routes due to increased
competitor capacity, specifically on North Atlantic routes.
The Groups cargo revenue declined by 8.5 per cent partially as a result of the softening of key markets impacting both yields and volumes.
Additionally, the Group exited the long-haul freighter programme in the prior year which impacted 2015 full year revenue. This has been offset to an
extent by the product mix with continued emphasis being placed on premium products. Other revenue has decreased by 7.0 per cent. This has
primarily been caused by the disposal of the BA Executive Club loyalty scheme in the year resulting in a significant reduction in loyalty redemption
revenue. There has been further strong performance by BA Holidays during 2015 with another increase in revenue for this business.

Operating costs
million
2015
2014
Better/(worse)
2,466
27
761
113
3,031
583
792
1,255
401
46
594
2,422
39
831
80
3,515
613
787
1,381
449
37
590
(1.8)%
30.8%
8.4%
(41.3)%
13.8%
4.9%
(0.6)%
9.1%
10.7%
(24.3)%
(0.7)%
Total Group expenditure on operations*
10,069
10,744
6.3%
Total Group expenditure excluding fuel*
7,038
7,229
2.6%
Employee costs
Restructuring
Depreciation, amortisation and impairment
Aircraft operating lease costs
Fuel, oil and emission costs
Engineering and other aircraft costs
Landing fees and en route charges
Handling charges, catering and other operating costs
Selling costs
Currency differences
Accommodation, ground equipment and IT costs
*Stated before exceptional items.

Fuel costs decreased year-on-year by 484 million, or 13.8 per cent, to 3,031 million compared to 3,515 million in the prior year. The decrease is
mainly attributed to a reduction in the average fuel price, net of the impact of hedging, partially offset by the adverse impact of foreign exchange and
by the increase in volume. BA also benefitted from the performance of our next generation fleet which are more fuel efficient.
Group expenditure excluding fuel has decreased by 191 million to 7,038 million, or a 2.6 per cent decrease. Given that ASKs increased by 2.0 per
cent, this represents a 4.5 per cent decrease in non-fuel costs per ASK driven mainly by cost saving initiatives around the business and the disposal of
the BA Executive Club.
Despite the increasing passenger volume, handling, catering and other operating costs have decreased by 9.1 per cent. This decrease is driven by the
disposal of the BA Executive Club in early 2015 offset to an extent by increased BA Holidays costs in line with their volume growth. Depreciation,
amortisation and impairment costs have decreased due to aircraft retirements in the year and the impact of reduced depreciation of 48 million per
annum from the extended lives of certain fleet. Engineering and other aircraft costs have decreased by 4.9 per cent arising from the reduction in rates
following the restructuring of certain maintenance agreements, which included a credit of 25 million, as well as a full year benefit of the cancellation of
the cargo freighter contract.
Selling costs have reduced by 10.7 per cent in line with the reduction in revenue on top of the benefits seen from a cost saving initiative. Aircraft lease
costs have increased by 41.3 per cent primarily due to additional Boeing 777 and Airbus A320 aircraft being financed under operating lease agreements.
Exceptional items
An exceptional item leading to a one-off loss of 25 million was recognised in the income statement in 2015 (2014: nil).
The litigation provision represents the continuation of the civil claims brought against BA in 2006. This provision represents a settled case against BA
in the cargo claim, for a total of 25 million. The final amount required to pay the remaining claims detailed in note 32 is subject to significant
uncertainty.
Non-operating items
Non-operating items are an income of 1,389 million in the current year (2014: expense of 116 million).
On 28 January 2015, BA entered into a business transfer agreement with Avios Group (AGL) Limited (AGL) which transferred certain parts of the BA
Executive Club business, relating to the frequent flyer programme, to AGL in return for additional shares in AGL. Following the restructure, BAs
shareholding reduced from 100 per cent of the AGL business to 86 per cent of the combined customer loyalty business. BA no longer has the power
to affect the returns of AGL as it now falls within the governance structure of IAG. From 28 January 2015 AGL was derecognised as a subsidiary of BA
and recognised as an associate at the fair value of the retained interest. On initial recognition the fair value of the retained investment in AGL was
measured at 1.6 billion with a gain recognised on loss of control of a subsidiary (below operating profit) of 1.5 billion. As consideration was received
in the form of shares this gain recognised is not distributable.
Offsetting the gain on disposal of the BA Executive Club are increased realised losses on fuel derivative contracts and adverse retranslation
movements on currency borrowings. An increased share of associates profit has been recognised this year which is due to AGL being classed as an
associate rather than a subsidiary.

Operating profit
During the year the Group achieved a pre-exceptional operating profit of 1,264 million (2014: 975 million) which is another new record for BA,
exceeding the previous record that was set in 2014. The Group will continue to focus on profitability over the coming years to finance the Groups
investment in new aircraft and ensure we are financially robust for the future.
Taxation
The tax charge on continuing operations for 2015 was 120 million (2014: 157 million). The Group profit before tax was 2,628 million but is stated
after the 1.5 billion gain on disposal of AGL, which is not taxable, and 149 million post-tax share of associates profits. After adjusting for these items
and the impact of tax rate changes, the Groups effective tax rate was 19.8 per cent, compared to the UK corporation tax rate of 20.25 per cent.
During the year, the net deferred tax liability has increased by 60 million to 282 million, primarily as a result of the significant mark-to-market losses
on hedging instruments driven by the sharp decline in fuel price offset by decreased defined benefit pension liabilities given significant actuarial gains
recognised in the year.
Capital expenditure
Total capital expenditure in the year amounted to 1,073 million (2014: 1,494 million). This comprised: 993 million in fleet-related spend (aircraft,
aircraft progress payments, spares, modifications and refurbishments) and 80 million on property, equipment, software, and landing rights.
During the year the Group took delivery of seven Airbus A320 aircraft, two Airbus A380 aircraft, five Boeing 787-900 aircraft and one Embraer E-190
aircraft.
Liquidity
The Groups liquidity position remains strong with 2.0 billion of cash, cash equivalents and other interest-bearing deposits (2014: 2.5 billion). Net debt
stood at 2.5 billion (2014: 2.0 billion). This increase arose from financing for new aircraft. Refer to note 20 of the financial statements for further
discussion around net debt.
In addition, the Group had undrawn long-term committed aircraft financing facilities totalling 2.5 billion (2014: 1.8 billion) and further committed
general facilities of 1.8 billion (2014: 0.6 billion).
Pensions
As reported in previous years, the Trustees of APS have purported to grant an additional discretionary increase above CPI inflation for the 2013/14
pensions in payment. BA has challenged the decision as it considers the Trustees have no power to grant such increases and it is concerned about the
actuarial funding position of the scheme. BA is also concerned about the residual unhedged risk in the scheme, which will be increased by the addition
of new unfunded benefits, to which BA may ultimately be exposed as the principal employer and sponsor of the scheme. BA is committed to an
existing recovery plan, which sees deficit payments of 55 million per annum until March 2023. Legal proceedings, initiated by BA, are underway to
determine the legitimacy of the additional discretionary increase. This discretionary increase has not been reflected in the accounting assumptions
used.

Principal risks and uncertainties
The highly regulated and commercially competitive environment, together with operational complexity, leaves the Group exposed to a number of
principal risks. The focus remains on mitigating these risks at all levels in the business, although many remain outside our control such as government
regulation, taxes, terrorism, adverse weather, pandemics and availability of funding from the financial markets. The risks and uncertainties described
below are the ones that are expected to have the most significant impact on the Group. The list presented is not intended to be exhaustive. The Group
carries out detailed risk management reviews to ensure that the risks are mitigated where possible.
Strategic
Competition
The markets in which the Group operates are highly competitive. Direct competition is faced from other airlines on routes, as well as from indirect
flights, charter services and from other modes of transport. Competitor capacity growth in excess of demand growth could materially impact our
margins. Some competitors have cost structures that are lower than BA or have other competitive advantages such as being supported by government
intervention. Fare discounting by some competitors has historically had a negative effect on the Groups results because a response is generally
required to competitors fares to maintain passenger traffic. In addition the low cost model continues to be extended into long-haul by our
competitors. The Groups strong global market positioning, leadership in strategic markets, alliances and diverse customer base continues to address
this risk.
Competitors, or new entrants to the travel market, may use digital technology to disrupt our business. The Groups unrelenting focus on the customer,
together with our own exploitation of digital technology, reduces the impact digital disrupters can have.
Consolidation and deregulation
Although the airline industry is competitive, we believe that the customer would benefit from further consolidation. This may involve further airline
failures or consolidation leading to opportunities to capture market share and expand the Group. Mergers and acquisitions amongst competitors have
the potential to adversely affect our market position and revenue. The Group maintains rigorous cost control and targeted product investment to
remain competitive.
The airline industry is increasingly dependent on alliances and BA is no exception to this. Maintaining a leading presence in oneworld and ensuring the
alliance itself performs as expected by the members is key in safeguarding the network. Some of the markets in which the Group operates remain
regulated by governments, in some instances controlling capacity and/or restricting market entry. Relaxation of such restrictions, while creating growth
opportunities for the Group, may have a negative impact on margins.
Joint Businesses
Some of BAs revenue is within joint businesses. BA is subject to the risks of these joint businesses and potentially the risks which may impact our
business partners. Strong governance and financial controls exist for each joint business.
Government intervention
Regulation of the airline industry is increasing and covers many of the Groups activities including safety, security, route flying rights, airport slot access
and environmental controls. The ability to both comply with and influence any changes in these regulations is key to maintaining performance.
Government taxes such as Air Passenger Duty, may have an adverse impact upon demand for air travel and/or reduce the profit margin per ticket.
These taxes may also benefit BAs competitors by reducing the relative cost of doing business from their respective hubs.
Infrastructure constraints
Heathrow has no spare runway capacity and has operated on the same two main runways since it opened over 60 years ago. As a result, the Group is
vulnerable to short-term operational disruption and there is little that can be done to mitigate this.
Airport, transit and landing fees and security charges represent a significant operating cost to BA. Whilst certain airport and security charges are passed
on to passengers by way of surcharges, others are not. BA is therefore particularly sensitive to Heathrow and Gatwick charges and how infrastructure
developments are prioritised at these airports.
Business and operational

Brand reputation
BAs brand has significant commercial value. Erosion of the brand, through either a single event or series of events, may adversely impact the
Companys leadership position with customers and could ultimately affect future revenue and profitability. The Group regularly monitors customer
satisfaction through the global customer survey, alongside ongoing research and development of the BA product, in order to mitigate this risk. BA
allocates substantial resources to safety, operational integrity, on-board product and new aircraft to maintain its leadership position.
Economic conditions
The Groups revenue is highly sensitive to economic conditions in the markets it operates in. Deterioration in either the domestic and/or global
economy may have a material impact on the reported financial position.
8

Employee relations
BA has a large unionised workforce. Collective bargaining takes place on a regular basis and a breakdown in the bargaining process may disrupt
operations and adversely affect business performance.
Failure of critical suppliers
BA is significantly dependant on critical suppliers particularly as industry supply chains are becoming more complex and outsourcing is increasing.
Failure of a critical supplier to deliver to contract may have a significant impact on operational performance and customer delivery. BA has robust
contingency plans and maintains regular oversight of suppliers to manage the risk of supplier failure.
Failure of a critical IT system
BA is dependent on IT systems for most of our principal business processes. The failure of a key system may cause significant disruption to operations
and result in lost revenue. System controls, disaster recovery and business continuity arrangements exist to mitigate the risk of a critical system failure.
In 2015 the BA Travel Programme commenced implementation of its new customer management system that provides passenger check-in and aircraft
boarding functionality. As such it is a critical operational system. In 2016 the system will be implemented in complex and high volume stations,
including Gatwick and Heathrow. The programme has a strong risk management work stream designed to minimise, but not eliminate, the risk of
disruption during implementation. The roll out plan is designed to build up operational experience of the system before it is implemented in higher
volume stations.
Pandemic
If there is a significant outbreak of an infectious disease, staff absence will increase which may seriously impact the operation. Key corporate clients may
discourage travel, significantly impacting sales. The Group has comprehensive business continuity plans.
Safety and security incidents
The safety and security of customers and employees is fundamental for BA. Failure to prevent or respond effectively to a major safety or security
incident may also adversely impact operations and financial performance. The Safety Committee satisfies itself that BA has appropriate safety
resources and procedures. The Crisis Management Centre responds in a structured way in the event of an incident.
Event causing significant network disruption
Several possible events may cause a significant network disruption. Example scenarios include a major failure of the public transport system, failure of
the air traffic control system, the complete or partial loss of the use of terminals at Heathrow, adverse weather conditions (such as snow, fog or
volcanic ash), widespread or coordinated air traffic control industrial action, war, civil unrest or terrorism. Such a disruption may result in lost revenue
and additional cost. Management has implemented robust business continuity plans to mitigate these risks to the extent feasible.
Financial
Financial risk management objectives, policies and procedures
The Group is exposed to a variety of financial risks, including market risk, credit risk, capital risk and liquidity risk. The Groups overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance. The BA
Board delegates certain responsibilities to IAG senior management, who directly control day-to-day treasury operations and operate within clearly
defined parameters. The financial risks faced by the Group are covered in note 26 to the financial statements.
The Group is exposed to currency devaluation of cash held in currencies other than the airlines local currency (sterling). This risk is minimised by
holding cash in sterling wherever possible but exchange controls in some markets will from time to time delay conversion and repatriation of funds.
The Group experienced delays in the repatriation of funds from Nigeria during the second half of 2015 and at the year-end held balances of 53 million
equivalent in Nigerian Naira.
Debt funding
The Group carries substantial debt that needs to be repaid or refinanced. The ability to finance ongoing operations and committed future fleet growth
plans is vulnerable to various factors including financial market conditions and financial institutions appetite for secured aircraft financing. The Group
carries substantial cash reserves and committed financing facilities to mitigate the risk of short-term interruptions to the aircraft financing market.
Fuel price
The Group used approximately 5.7 million tonnes of jet fuel in 2015. Volatility in the price of oil and petroleum products can have a material impact on
the Groups operating results. This price risk is partially hedged through the purchase of oil derivatives in forward markets, which can generate a profit
or a loss. The financial risks faced by the Group are covered in more detail in note 26 to the financial statements.
Geopolitical tensions
Instability from geopolitical factors in any of our markets may have a detrimental impact on revenue and operating costs. BA maintains ongoing
oversight of all markets and can adapt operational plans and capacity when prudent.

Pensions
Negative movements in pension asset values and financial returns from these assets may increase the size of the pension deficit. Management regularly
review the status of the pension funds and remain committed to taking appropriate action.
Compliance and regulatory

Compliance with Competition, Bribery and Sanctions Laws
The Group is exposed to the risk of individual colleagues or groups of colleagues unethical behaviour resulting in fines or losses to the Group. The
Group has comprehensive policies and training schemes in place to educate colleagues.
The Strategic report is approved by the Board and signed on its behalf by:
Keith Williams
Executive Chairman
26 February 2016
Nick Swift
Chief Financial Officer
26 February 2016
10
Directors report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2015.
Business review
A review of the Groups business, future developments and principal risks is detailed further on pages 2 to 10 of the Strategic report.
Results and dividends
The pre-exceptional operating profit for the year ended 31 December 2015 amounted to 1,264 million (2014: 975 million).
An interim dividend of 240 million was paid in October 2015 and a further interim dividend of 20 million was paid in December 2015.
The Board has decided not to recommend the payment of a final dividend in respect of the year ended 31 December 2015 (2014: nil).
Directors
The Directors who served during the year and since the year end are as follows:
Keith Williams
Alison Reed
Nick Swift
Andrew Crawley
Frank van der Post
Ken Smart
Gavin Patterson
Garrett Copeland
Julia Simpson
Lynne Embleton
resigned 7 January 2016

resigned 31 March 2015
appointed 7 January 2016
It was announced on 6 November 2015 that Keith Williams and Nick Swift would be resigning as Directors of the Company during Q1 2016. They will
be replaced by Alex Cruz, Chairman and CEO of Vueling, and Steve Gunning, CEO of IAG Cargo respectively.
Company Secretary
Andrew Fleming
Employment policies
The employment policies in place aim to balance rights of colleagues and the responsibilities of the Group in order to drive the business forward. The
policies are regularly reviewed and updated with input from colleagues. The overall aim is to have policies that are fair, legally compliant, cost effective
and that empower line managers.
BA continues to drive genuine and effective engagement with colleagues, putting the customer at the forefront of everything it does and maintaining a
high performing organisation. BAs objective is to have involved colleagues, with deep knowledge of their customers, who are empowered to serve
their needs proactively.
There is a framework in place for consultation with colleagues, through direct engagement as well as collective bargaining, enabling everyone to have
an open and honest dialogue with the Group. Regular briefings (including updates on financial and economic factors affecting the performance of the
Group) are run across the airline and other communication channels include live online forums, a personalised intranet, mobile SMS and video
messages and a range of BA-wide and local newsletters
BA is committed to delivering competitive packages that reward colleagues for their performance and contribution to the business and allow us to
attract, retain and grow existing and future talent. BA drives the involvement of colleagues in the Groups performance through the employee bonus
scheme and the IAG group share schemes for eligible employees.
As a responsible organisation, disability is taken very seriously and applications are welcomed from individuals with disabilities. BA aims to employ the
most talented people and thus has procedures in place to ensure that individuals with disabilities are supported in reaching their full potential by making
reasonable adjustments for them in the workplace. BA has held the Two Ticks disability symbol for more than five years as recognition both of our
commitment to encourage job applications from disabled people and to support disabled colleagues within BA.
Wellbeing and Inclusion is a key part of BAs people strategy. Mandatory training on inclusion principles, and how to avoid discrimination, continues for
all colleagues and managers to ensure that BA has a culture of fairness and respect and all our colleagues feel supported and able to be their best at
work.
Political donations
The Group does not make political donations or incur political expenditure and has no intention of doing so.
11
Directors report continued

Internal control and risk management
Corporate Governance
As the shares of the Company are not listed, it is not required to comply with the UK Corporate Governance Code. However, as the Company
continues to be an issuer of listed debt it remains subject to certain provisions of the Companies Act 2006, Listing Rules and the Disclosure and
Transparency Rules. In order to comply with these provisions, certain information about the Companys corporate governance is detailed in this report.
The Group has in place internal control and risk management systems in relation to the Groups financial reporting process and the process for the
preparation of consolidated financial statements. During the year, no changes in risk management and internal control systems over financial reporting
have occurred that have materially affected, or are reasonably likely to have materially affected, the Groups financial reporting.
Internal control framework

Effective Corporate Governance remains key to the business. The Group continues to review its internal control framework to ensure it maintains a
strong and effective internal control environment. During the reporting period, the effectiveness of the framework was regularly reviewed by the
Leadership Team.
Business controls are reviewed on an ongoing basis by the internal audit function through a programme based on risk assessment. Professionally
qualified personnel manage the department with experience gained from both inside and outside the industry. A risk-based audit plan, which provides
assurance over key business processes and commercial and financial risks facing the Group, is approved by the IAG Audit Committee half-yearly.
The BA Board consider significant control matters raised by management and both the internal and external auditors, and report its findings to the IAG
Audit Committee. Where weaknesses are identified, the BA Board ensures that management take appropriate action.
Risk management
The Group has a structure and process to help identify, assess and manage risks. This process has been in place throughout the reporting period to
which these statements apply and up to the date of their approval.
During the year, the Risk Group consisted of the Leadership Team, the Head of Corporate Risk and Compliance and key senior executives. Meeting
quarterly, it reviews the Groups key risks contained in the corporate risk register and ensures that all new and emerging risks are appropriately
evaluated and any further actions identified. The Risk Group also provides policy and guidance to those responsible for managing the individual risks
and to the departmental risk leaders.
The management of each major area of corporate risk is subject to review by an appropriate assurance body. This includes a review of the controls in
place to mitigate the risks and the further actions being taken by management. The Risk Group reports quarterly to the BA Board to assist in the
management of risk in accordance with the UK Corporate Governance Code (2014).
The risk management process includes multiple opportunities for rigorous discussion and debate to assess the relative profile of each risk. The
outcome includes a heat map which plots each critical risk on an impact and probability scale. For each critical risk, mitigating actions exist and are
actively managed and this process is iterative and refreshed on an ongoing basis. The Strategic report does not include the mitigating actions for the
principal risks because of the sensitive commercial nature of some of managements plans. The principal risk and uncertainties are detailed further on
pages 8 to 10 of the Strategic report.
Overseas branches
The Group flies to a number of destinations around the world. In addition to the overseas branches established in many of these countries, there are
also branches in countries to which BA does not fly. A full list of destinations can be found on the website www.ba.com.
Going concern
The business activities, performance, strategy and risks of the Group are set out in this report. The financial position of the Group, including cash flows,
liquidity position and available committed facilities are discussed in the financial review on pages 5 to 7 of the Strategic report, and further information
is provided in note 26 of the financial statements.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue operating
for the foreseeable future. For this reason, the going concern basis has been adopted in preparing the financial statements.
12
Directors report continued

Events after the balance sheet date
No other significant events have taken place post the balance sheet date.
Directors and Officers liability insurance and indemnities
IAG purchased insurance against Directors' and Officers' liability covering the IAG Group, as permitted by the Companies Act 2006, for the benefit of
the Directors and Officers.
The Company has granted rolling indemnities to the Directors and the Secretary, uncapped in amount but subject to applicable law, in relation to
certain losses and liabilities which they may incur in the course of acting as officers of companies within the Group. These indemnities also set out the
terms on which the Company may, in its discretion, advance defence costs. The indemnities were in force during the whole of the financial year or from
the date of appointment in respect of Officers who joined during 2015 and remain in force.
The Company has granted qualifying pension scheme indemnities in the form permitted by the Companies Act 2006 to the Directors of two
companies, British Airways Pension Trustees Limited and British Airways Pension Trustees (No 2) Limited, that act as trustees of the Companys UK
pension schemes. These indemnities were in force throughout the last financial year or from the date of appointment in respect of Officers who joined
during 2015 and remain in force.
Auditors
In accordance with Section 489 of the Companies Act 2006, resolutions concerning the re-appointment of the auditor, Ernst & Young LLP and
authorising the Directors to set their remuneration will be proposed at the next Annual General Meeting.
Directors statement as to disclosure of information to the auditor
The Directors who are members of the Board at the time of approving the Directors report and business review are listed above. Having made
enquiries of fellow Directors and of the Groups auditor, each of these Directors confirms that:

To the best of each Directors knowledge and belief there is no information relevant to the preparation of the auditor's report of which the
Groups auditor is unaware; and
Each Director has taken all the steps a Director might reasonably be expected to have taken to make him or herself aware of relevant audit
information and to establish that the Groups auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418(2) of the Companies Act 2006.
Directors responsibilities statement in relation to the financial statements

The Directors as listed are responsible for preparing the Strategic report, Directors report and the financial statements in accordance with applicable
UK law and those International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The Directors are required to prepare financial statements for each financial period, which present fairly the financial position of the Company and of
the Group and the financial performance and cash flows of the Company and of the Group for that period. In preparing those financial statements, the
Directors are required to:

Select suitable accounting policies and then apply them consistently;

Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
Provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of
particular transactions, other events and conditions on the entitys financial position and financial performance; and
State that the Group has complied with IFRS, subject to any material departures disclosed and explained in the financial statements.
The Directors as listed are responsible for keeping adequate accounting records, which disclose, with reasonable accuracy at any time, the financial
position of the Company and of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006 and Article
4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. In addition, the Directors are responsible for the maintenance and integrity of the corporate and financial
information included in the Companys website. Legislation in the UK governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
13
Directors responsibility statement pursuant to DTR 4

The Directors as listed confirm that, to the best of each persons knowledge:
The Group and Company financial statements in this report, which have been prepared in accordance with IFRS as adopted by the European
Union, IFRIC interpretation and those parts of the Companies Act 2006 applicable to companies reporting under IFRS, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Group as a whole and of the Company; and
The management report contained in this report includes a fair review of the development and performance of the business and the position of
the Group as a whole and of the Company, together with a description of the principal risks and uncertainties that they face.
Approved by the Board and signed on its behalf by
Andrew Fleming
Company Secretary
26 February 2016
Company registration number - 1777777
14
British Airways Plc

Independent auditors report
We have audited the financial statements of British Airways Plc for the year ended 31 December 2015 which comprise the Group consolidated income
statement, the Group statement of other comprehensive income, the Group and Parent Company balance sheets, the Group and Parent Company cash
flow statements, the Group and Parent Company statement of changes in equity and the related notes 1 to 35. The financial reporting framework that
has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as
regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Companys members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the Companys members those matters we are required to state to them in an auditors report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the companys
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the directors responsibilities statement set out on pages 13 and 14, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Boards Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Groups and the Parent Companys circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read
all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:

the financial statements give a true and fair view of the state of the Groups and of the Parent Companys affairs as at 31 December 2015 and of
the Groups profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Strategic report and the Directors report for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Debbie O'Hanlon (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor
London
26 February 2016
15
Group consolidated income statement

For the year ended 31 December
Group
million
Note
2015
2014
10,164
10,452
Passenger revenue
Cargo revenue
Traffic revenue
547
598
10,711
11,050
622
669
Total revenue
11,333
11,719
Employee costs
2,466
2,422
Restructuring
27
39
761
831
Other revenue
Aircraft operating lease costs

Fuel, oil and emission costs
113
80
3,031
3,515
583
613
Landing fees and en route charges
792
787
1,255
1,381
401
449
46
37
Handling charges, catering and other operating costs

Selling costs
Currency differences
Total expenditure on operations before exceptional items
Operating profit before exceptional items
594
590
10,069
10,744
1,264
975
Exceptional items
(25)
Operating profit
1,239
975
(121)
(37)
Losses on fuel derivatives not qualifying for hedge accounting

Finance costs
(147)
(141)
Finance income
24
17
(9)
(3)
Net financing charge relating to pensions
31b
Net currency retranslation charges

Share of post-tax profits in associates accounted for using the equity method
17
Gain on disposal of property, plant and equipment and investments
(13)
(1)
149
39
1,502
Net gain relating to available-for-sale financial assets

Profit before tax
Tax
10
Profit after tax
10
2,628
859
(120)
(157)
2,508
702
2,493
686
Attributable to:
Equity holders of the parent
Non-controlling interest
The above results are all in respect of continuing operations.
16
15
16
2,508
702
Group statement of other comprehensive income

Group
million
Note
Profit for the year
2015
2014
2,508
702
(467)
Other comprehensive income:

Items that will not be re-classified to the income statement
Remeasurement of post-employment benefit obligations
31c
152
Income taxes
10
(37)
148
115
(319)
Items that may be re-classified to the income statement

Currency translation differences
30a
(9)
(5)
Fair value movements in equity on cash flow hedges
30a
(684)
(958)
Fair value of cash flow hedges reclassified to the income statement
30a
892
105
Share of other movements in reserves of associates
17
(1)
(72)
Available-for-sale financial assets - marked to market
30a
(8)
46
Available-for-sale financial assets - recycled to income statement
30a
(9)
(42)
170
149
(723)
264
(1,042)
2,772
(340)
2,757
(356)
Income taxes
10
Total other comprehensive income/(loss)

Total comprehensive income/(loss) for the year (net of tax)
Attributable to:
Equity holders of the parent
Non-controlling interest
30a
17
15
16
2,772
(340)
Balance sheets
As at 31 December
million
Non-current assets
Property, plant and equipment:
Fleet
Property
Equipment
Group
Intangibles:
Goodwill
Landing rights
Emissions allowances
Software
Investments in subsidiaries
Investments in associates
Available-for-sale financial assets
Employee benefit assets
Derivative financial instruments
Other non-current assets
Total non-current assets
Non-current assets held for sale
Current assets and receivables
Inventories
Trade receivables
Other current assets
Other current interest-bearing deposits
Cash and cash equivalents
2015
2014
2015
2014
12
12
12
7,066
802
252
8,120
6,930
808
252
7,990
6,813
765
239
7,817
6,646
769
231
7,646
15
15
15
15
40
665
6
270
981
1,775
47
697
12
340
11,972
4
40
667
26
216
949
76
63
673
18
69
9,838
5
643
6
270
919
1,315
1,563
40
697
12
441
12,804
4
48
673
18
195
10,791
5
139
541
614
59
1,199
848
2,047
3,400
15,376
133
531
326
70
1,849
674
2,523
3,583
13,426
136
527
760
60
1,199
790
1,989
3,472
16,280
129
516
470
72
1,849
619
2,468
3,655
14,451
290
1,512
2,596
4,398
200
4,598
290
1,512
98
1,900
200
2,100
290
1,512
2,399
4,201
4,201
290
1,512
(7)
1,795
23
31
10
25
27
22
3,782
618
282
233
101
62
5,078
4,121
1,042
222
210
139
90
5,824
4,020
602
193
156
101
36
5,108
4,354
1,019
120
133
139
60
5,825
23
21
27
728
4,197
548
69
158
5,700
15,376
428
4,220
691
36
127
5,502
13,426
706
5,559
550
29
127
6,971
16,280
421
5,595
693
26
96
6,831
14,451
17
17
18
31
27
19
14
19
19
27
20
20
Total current assets and receivables

Total assets
Shareholders' equity
Issued share capital
Share premium
Other reserves
Total shareholders' equity
Non-controlling interests
Total equity
Non-current liabilities
Interest-bearing long-term borrowings
Employee benefit obligations
Provisions for deferred tax
Non-current provisions
Other non-current liabilities
Total non-current liabilities
Current liabilities
Current portion of long-term borrowings
Trade and other payables
Current tax payable
Current provisions
Total current liabilities
Total equity and liabilities
28
28
30
30
25
Approved by the Board and signed on its behalf by
Nick Swift
Chief Financial Officer
26 February 2016
Keith Williams
Executive Chairman
26 February 2016
18
Company
Note
643
26
216
885
1,326
1,795
Cash flow statements

Group
million
Note
Company
2015
2014
2015
2014
1,264
975
1,201
910
761
831
723
795
(302)
(312)
(301)
(311)
Cash flow from operating activities
Operating profit
Cash payments to pension schemes (excluding service costs)
31d
(320)
12
(352)
53
Interest paid
(113)
(113)
(101)
(94)
Taxation
(100)
(21)
(98)
(22)
Net cash generated from operating activities
1,190
1,372
1,072
1,331
(1,073)
(1,494)
(1,067)
(1,470)
(7)
(10)
36
104
Movement in working capital and other non-cash movements
Cash flow used in investing activities

Purchase of property, plant and equipment and intangible assets
Investment in subsidiaries
17
Sale of property, plant and equipment and intangible assets
36
Cash disposed of on disposal of AGL
(2)
Loan made to related party
119
(292)
Interest received
23
Dividends received
12
Other investing movements
Decrease/(increase) in other current interest-bearing deposits

Net cash used in investing activities
(292)
21
23
21
72
650
(629)
650
(629)
(637)
(1,979)
(585)
(1,974)
Cash flow from financing activities

459
1,391
459
1,391
Repayments of borrowings
(122)
(170)
(96)
(147)
Repayment of finance leases
(470)
(564)
(468)
(580)
Dividends paid
(259)
Proceeds from long-term borrowings
Loan received from related party
(259)
29
Distributions made to holders of perpetual securities

Net cash flow from financing activities
Net change in cash and cash equivalents from continuing operations
29
(15)
(16)
(378)
641
(335)
664
175
34
152
21
DISCONTINUED OPERATIONS
Net cash flow used in discontinued operations
Net change in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at 1 January
20
Cash and cash equivalents as at 31 December
At 31 December 2015 cash and cash equivalents includes 53 million of restricted cash in Nigeria.
19
(12)
175
22
152
21
(1)
22
19
36
674
630
619
562
848
674
790
619
Statements of changes in equity

For the year ended 31 December 2015
million
Balance at 1 January 2015
Group
Other
Total
Non-
Issued
Share
reserves
shareholders'
controlling
Total
capital
premium
(note 30)
equity
interest
equity
290
1,512
98
1,900
200
2,100
2,493
2,493
15
2,508
15
2,772
Profit for the year

Other comprehensive income for the year
264
264
Total comprehensive income for the year
2,757
2,757
Distributions made to holders of ordinary shares
(260)
(260)
Cost of share-based payment (net of tax)

As at 31 December 2015
290
1,512
264
(260)
1
(15)
(15)
4,598
2,596
4,398
200
Other
reserves
(note 30)
453
686
(1,042)
(356)
1
Total
shareholders'
equity
2,255
686
(1,042)
(356)
1
Noncontrolling
interest
200
16
98
1,900
Group
million
Issued
capital
290
Share
premium
1,512
Profit for the year

290
1,512
16
(16)
200
Total
equity
2,455
702
(1,042)
(340)
1
(16)
2,100
Company
Other
million
Issued
Share
reserves
Total
capital
premium
(note 30)
equity
290
1,512
Profit for the year

(7)
1,795
2,395
2,395
270
270
2,665
2,665
(260)
(260)

290
1,512
2,399
4,201
Company
million
Issued
capital
290
Share
premium
1,512
290
1,512
Profit for the year

20
Other
reserves
(note 30)
463
483
(954)
(471)
1
(7)
Total
equity
2,265
483
(954)
(471)
1
1,795
Authorisation of financial statements and compliance with IFRSs
The Groups and Company's financial statements for the year ended 31 December 2015 were authorised for issue by the Board of Directors on 26
February 2016 and the balance sheets were signed on the Board's behalf by Keith Williams and Nick Swift. British Airways Plc is a public limited
company incorporated and domiciled in England and Wales.
The Group has prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by
the EU. IFRSs as adopted by the EU differ in certain respects from IFRSs as issued by the International Accounting Standards Board (IASB).
References to 'IFRS' hereafter should be construed as references to IFRSs as adopted by the EU. The principal accounting policies adopted by the
Group and by the Company are set out in note 2.
The Company has taken advantage of the exemption provided under Section 408 of the Companies Act 2006 not to publish its individual income
statement and related notes.
Summary of significant accounting policies
Basis of preparation
The basis of preparation and accounting policies set out in this Report and Accounts have been prepared in accordance with the recognition and
measurement criteria of IFRSs, which also include International Accounting Standards (IASs), as issued by the IASB and with those of the Standing
Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB.
These financial statements have been prepared on a historical cost convention except for certain financial assets and liabilities, including derivative
financial instruments and available-for-sale financial assets, that are measured at fair value.
The Groups and Companys financial statements are presented in pounds sterling and all values are rounded to the nearest million pounds ( million),
except where indicated otherwise.
The Directors have considered the Groups business activities (as set out on page 2), principal risks and uncertainties (as set out on pages 8 and 9), and
the Groups financial position, including cash flows, liquidity position and available committed facilities. The Directors consider that the Group has
adequate resources to remain in operation for the foreseeable future and have therefore continued to adopt the going concern basis in preparing the
financial statements.
Basis of consolidation
The Group financial statements (and throughout) include those of the Company and its subsidiaries, each made up to 31 December, together with the
attributable share of results and reserves of associates, adjusted where appropriate to conform with the Groups accounting policies.
Subsidiaries are all entities (including structured entities) controlled by the Group. Control exists when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
All intra-group account balances, including intra-group profits, have been eliminated in preparing the consolidated financial statements. Non-controlling
interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented separately within equity
in the consolidated balance sheet.
Interests in associates
An associate is an undertaking in which the Group has a long-term equity interest and over which it has the power to exercise significant influence. The
Groups interest in the net assets of associates is included in investment in associates in the consolidated balance sheet and its interest in their results is
included in the income statement, below operating profit. The attributable results of those companies invested in or disposed of during the year are
included for the period of ownership.
In the Company balance sheet investments in associates are recognised at cost subject to impairment review.
Revenue
Passenger and cargo revenue is recognised when the transportation service is provided. Passenger tickets net of discounts are recorded as current
liabilities as deferred revenue on ticket sales until the customer has flown. Unused tickets are recognised as revenue using estimates regarding the
timing of recognition based on the terms and conditions of the ticket and statistical analysis of historical trends.
Other revenue including maintenance, handling, holiday and commission revenues is recognised at the time the service is provided in accordance with
the invoice or contract.
Revenue recognition customer loyalty programmes
The Group operated two principal loyalty programmes for part of the year; BA Executive Club and Avios. These were disposed of outside the Group
on 28 January 2015 (see note 17 for further information). These principal customer loyalty programmes awarded travellers Avios points to redeem for
various rewards, primarily redemption travel, including flights, hotels and car hire. In accordance with IFRIC 13 Customer loyalty programmes, the fair
value attributed to the awarded Avios points was deferred as a liability and recognised as revenue on redemption of the points and provision of service
to the participants to whom the Avios points were issued.
21
Summary of significant accounting policies continued
Revenue recognition customer loyalty programmes continued

In addition, Avios points were sold to commercial partners to use in loyalty activities. The fair value of the Avios points sold was deferred and
recognised as revenue on redemption of the Avios points by the participants to whom the Avios points were issued. The cost of the redemption of the
Avios points was recognised when the Avios points were redeemed.
The Group estimated the fair value of Avios points by reference to the fair value of the awards for which they could be redeemed and was reduced to
take into account the proportion of award credits that were not expected to be redeemed based on the results of statistical modelling. The fair value
of the Avios point reflected the fair value of the range of available awards.
The Group also operates other smaller loyalty programmes for which the fair value of points are deferred as a liability and recognised as revenue on
redemption of the points and provision of services to members.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief
operating decision-maker, who is responsible for resource allocation and assessing performance of the operating segments, has been identified as the
Leadership Team. The Leadership Team is made up of the Executive Directors and other key management personnel and is responsible for the day-today running of the Group and discharging managerial responsibility.
Intangible assets
Intangible assets are held at cost and are either amortised on a straight-line basis over their economic life, or they are deemed to have an indefinite
economic life and are not amortised, but tested annually for impairment.
The carrying value of intangibles is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.
a
Goodwill
Where the cost of a business combination exceeds the fair value attributable to the net assets acquired, the resulting goodwill is capitalised and tested
for impairment annually and whenever indicators exist that the carrying value may not be recoverable. Any goodwill arising on the acquisition of equity
accounted entities is included within the cost of those entities. Where the net fair value of the identifiable assets and liabilities of the acquiree is in
excess of the consideration paid, a gain on bargain purchase is recognised immediately in the income statement.
Goodwill is allocated to cash-generating units for the purpose of impairment testing.
b
Landing rights
Landing rights acquired from other airlines are capitalised at cost on acquisition (or fair value when acquired through a business combination).
Subsequently they are accounted for at cost less any accumulated impairment losses. Capitalised landing rights based outside the EU are amortised on
a straight-line basis over a period not exceeding 20 years. Capitalised landing rights based within the EU are not amortised, as regulations provide that
these landing rights are perpetual.
c
Software
The cost of purchase or development of computer software that is separable from an item of related hardware is capitalised and amortised over a
period not exceeding five years on a straight-line basis.
d
Emissions allowances
Purchased emissions allowances are initially recognised at cost and are not revalued or amortised but are tested for impairment whenever indicators
exist that the carrying value may not be recoverable.
Property, plant and equipment
Property, plant and equipment is held at cost. The Group has a policy of not revaluing property, plant and equipment. Depreciation is calculated to
write off the cost less estimated residual value on a straight-line basis, over the economic life of the asset. Residual values, where applicable, are
reviewed annually against prevailing market values for equivalently aged assets and depreciation rates are adjusted accordingly on a prospective basis.
The carrying value is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable and the
cumulative impairment losses are shown as a reduction in the carrying value of property, plant and equipment.
a
Capitalisation of interest on progress payments
Interest attributed to progress payments, and related exchange movements on foreign currency amounts, made on account of aircraft and other
qualifying assets under construction are capitalised and added to the cost of the asset concerned.
All other borrowing costs are recognised in the income statement in the year in which they are incurred.
b
Fleet
All aircraft are stated at the fair value of the consideration given after taking account of manufacturers' credits. Fleet assets owned, or held on finance
lease, are depreciated at rates calculated to write down the cost to the estimated residual value over a depreciation period of between seven and 29
years. For engines maintained under pay-as-you-go contracts, the depreciation lives and residual values are the same as the aircraft to which the
engines relate. For all other engines, the engine core is depreciated to its residual value over the average remaining life of the related fleet.
Cabin interior modifications, including those required for brand changes and relaunches, are depreciated over the lower of five years and the remaining
life of the aircraft.
22
Property, plant and equipment continued

b
Fleet continued
Aircraft and engine spares acquired on the introduction or expansion of a fleet, as well as rotable spares purchased separately, are carried as property,
plant and equipment and generally depreciated in line with the fleet to which they relate.
Major overhaul expenditure, including replacement spares and labour costs, is capitalised and amortised over the average expected life between major
overhauls. Major overhaul expenditure is depreciated over periods ranging from 26-78 months, according to the engine type. All other replacement
spares and other costs relating to maintenance of fleet assets (including maintenance provided under 'pay-as-you-go' contracts) are charged to the
income statement on consumption or as incurred respectively.
c
Property and equipment
Provision is made for the depreciation of all property and equipment, apart from freehold land, based upon expected useful lives, or in the case of
leasehold properties over the duration of the leases if shorter, on a straight-line basis. Property, with the exception of freehold land, is depreciated over
its expected useful life subject to a maximum of 50 years. Equipment is depreciated over periods ranging from four to 20 years.
d
Leased assets
Where assets are financed through finance leases, under which substantially all the risks and rewards of ownership are transferred to the Group, the
assets are treated as if they had been purchased outright. The amount included in the cost of property, plant and equipment represents the aggregate
of the capital elements payable during the lease or hire purchase term. The corresponding obligation, reduced by the appropriate proportion of lease or
hire purchase payments made, is included in borrowings.
The amount included in the cost of property, plant and equipment is depreciated on the basis described in the preceding paragraphs and the interest
element of lease or hire purchase payments made is included in interest expense in the income statement.
Total minimum payments, measured at inception, under all other lease arrangements, known as operating leases, are charged to the income statement
in equal annual amounts over the period of the lease. In respect of aircraft, certain operating lease arrangements allow the Group to terminate the
leases after a limited initial period, without further financial obligations. In certain cases the Group is entitled to extend the initial lease period on
predetermined terms; such leases are described as extendable operating leases.
Non-current assets are classified as held for sale when their carrying value is to be recovered principally through sale as opposed to continuing use. The
sale must be considered to be highly probable and to be achieved within twelve months. Held for sale assets are carried at the lower of carrying value
and fair value less costs to sell. Assets are not depreciated or amortised once classified as held for sale.
Inventories
Inventories, including aircraft expendables, are valued at the lower of cost and net realisable value, determined by the weighted average cost method.
Inventories include mainly aircraft spare parts, repairable aircraft engine parts and fuel.
Cash and cash equivalents includes cash in hand and deposits with any qualifying financial institution repayable on demand or maturing within three
months of the date of acquisition and which are subject to an insignificant risk of change in value.
Other current interest-bearing deposits, principally comprising funds held with banks and other financial institutions, are carried at amortised cost using
the effective interest method.
Trade and other receivables
Trade and other receivables are stated at cost less allowances made for doubtful receivables, which approximates fair value given the short-dated
nature of these assets. A provision for impairment of receivables (allowance for doubtful receivables) is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the original terms of the receivable.
Employee benefits
Employee benefits, including pensions and other post-retirement benefits (principally post-retirement healthcare benefits) are presented in these
financial statements in accordance with IAS 19 'Employee Benefits'.
a
Pension obligations
The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the current and prior periods.
The Groups net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit
that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the
fair value of any plan assets are deducted. The discount rate is the yield at the balance sheet date on AA-rate corporate bonds of the appropriate
currency that have durations approximating those of the Groups obligations. The calculation is performed by a qualified actuary using the projected
unit credit method. When the net obligation calculation results in an asset to the Group, recognition of an asset is limited to the present value of any
future refunds from the plan or reductions in future contributions to the plan (the asset ceiling). The cost of administering the Groups defined benefit
pension plans is provided for when the services are received, whilst the cost of managing the plan investments is treated as part of the return on plan
assets.
23
Employee benefits continued

a
Pension obligations continued
The fair value of scheme assets is based on market price information and, in the case of quoted securities, is the published bid price. The fair value of
insurance policies which exactly match the amount and timing of some or all benefits payable under the scheme are deemed to be the present value of
the related obligations. Longevity swaps are measured at their fair value.
Current service costs are recognised within operating expenses in the period in which they arise. Past service costs are recognised at the earlier of the
plan amendment or curtailment occurring and when the Group recognises the related restructuring costs or termination benefits. The net interest is
calculated by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the net defined benefit liability
or asset, taking into account any changes in the net defined benefit liability or asset during the period as a result of contributions and benefit payments.
Net interest and other expenses related to the defined benefit plans are recognised in the income statement. Re-measurements, comprising of
actuarial gains and losses, the effect of the asset ceiling (excluding interest) and the return on plan assets (excluding interest), are recognised
immediately in the statement of other comprehensive income. Re-measurements are not reclassified to profit or loss in subsequent periods.
b
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts
voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either
terminating the employment of current employees according to a detailed formal plan without realistic possibility of withdrawal, or providing
termination benefits as a result of an offer made to encourage voluntary redundancy.
Other employee benefits are recognised when there is deemed to be a present obligation.
Share-based payments
The Group has a number of equity-settled share-based employee incentive plans in which the Groups employees participate. Prior to the merger with
Iberia, the awards were made under schemes operated by the Company and represented rights over its ordinary shares. These awards rolled over into
awards in respect of shares in IAG at the merger. Subsequent to the merger, awards are made under schemes operated by IAG and represent rights
over its ordinary shares. The cost of these awards is recharged from IAG to the Group and recognised in intercompany payables to IAG.
Taxation
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted at the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
Where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
In respect of taxable temporary differences associated with investments in subsidiaries or associates, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and
Deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is
realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in
the income statement.
Provisions
Provisions are made when an obligation exists for a future liability in respect of a past event and where the amount of the obligation can be reliably
estimated. Restructuring provisions are made for direct expenditures of a business reorganisation where the plans are sufficiently detailed and well
advanced and where appropriate communication to those affected has been undertaken at the balance sheet date. If the effect is material, expected
future cash flows are discounted using a rate that reflects, where appropriate, the risks specific to the provision. Where discounting is used, the increase
in the provision due to unwinding the discount is recognised as a finance cost.
Foreign currency translation
Transactions in foreign currencies are initially recorded in the Groups functional currency, sterling, by applying the spot exchange rate ruling at the
date of the transaction. Monetary foreign currency balances are translated into sterling at the rates ruling at the balance sheet date. All other profits or
losses arising on translation are dealt with through the income statement except where hedge accounting is applied.
24
Foreign currency translation continued

The net assets of foreign operations are translated into sterling at the rate of exchange ruling at the balance sheet date. Profits and losses of such
operations are translated into sterling at average rates of exchange during the year. The resulting exchange differences are taken directly to a separate
component of equity until all or part of the interest is sold, when the relevant portion of the cumulative exchange is recognised in the income
statement.
Financial instruments
In accordance with IAS 39 'Financial Instruments - Recognition and Measurement', financial instruments are recorded initially at fair value. Subsequent
remeasurement of those instruments at the balance sheet date reflects the designation of the financial instrument. The Group determines the
classification at initial recognition and re-evaluates this designation at each period-end, except for those financial instruments measured at fair value
through the income statement.
a
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in the active market. Such assets are
carried at amortised cost using the effective interest method if the time value of money is insignificant. This category of financial assets includes trade
and other receivables.
b
Other equity investments (other than interests in associates) classified as available-for-sale financial assets are those that are neither classified as held
for trading nor designated at fair value through profit or loss, and are recorded at fair value. Any change in the fair value is reported in equity until the
investment is sold, when the cumulative amount recognised in equity is recognised in the income statement. In the case of equity securities classified as
available-for-sale investments, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the
security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss previously reported in equity is included in the
income statement.
The fair value of quoted investments is determined by reference to published bid prices at the close of business on the balance sheet date. Where
there is no active market, fair value is determined using valuation techniques. Where fair value cannot be reliably estimated, assets are carried at cost
(disclosed in note 27b).
c
Derivatives
Derivative financial instruments, comprising foreign exchange derivatives and fuel hedging derivatives (including options, swaps and futures), are
measured at fair value on the Group balance sheet. The treatment of gains and losses arising from revaluation is described below in the accounting
policy for cash flow hedges. The gains or losses related to derivatives not used as effective hedging instruments are recognised in the income
statement.
d
Financial liabilities measured at amortised cost
Long-term borrowings are recorded at amortised cost. Certain leases contain interest rate swaps that are closely related to the underlying financing
and, as such, are not accounted for as an embedded derivative.
Cash flow hedges
Changes in the fair value of derivative financial instruments are reported through operating income or financing according to the nature of the
instrument, unless the derivative financial instrument has been designated as a hedge of a highly probable expected future cash flow. Gains and losses
on derivative financial instruments designated as cash flow hedges and assessed as effective for the period are taken to equity. Gains and losses taken
to equity are reflected in the income statement when either the hedged cash flow impacts income or the hedged item is no longer expected to occur.
Certain loan repayment instalments denominated in US dollars, euro, Chinese yuan and Japanese yen are designated as cash flow hedges of highly
probable future foreign currency revenues. Exchange differences arising from the translation of these loan repayment instalments are taken to equity in
accordance with IAS 39 requirements and subsequently reflected in the income statement when either the future revenue impacts income or its
occurrence is no longer expected to occur.
Impairment of financial assets
The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired. A financial asset is considered impaired
if objective evidence indicates that one or more events that have occurred since the initial recognition of the asset have had a negative impact on the
estimated future cash flows of that asset.
An impairment loss in respect of a financial asset carried at amortised cost is calculated as the difference between its carrying amount and the present
value of the estimated future cash flows discounted at the assets original effective interest rate.
Derecognition of financial assets and liabilities
A financial asset or liability is generally derecognised when the contract that gives rise to it has been settled, sold, cancelled or has expired.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such
that the difference in the respective carrying amounts are recognised in the income statement.
25
Exceptional items
Exceptional items (disclosed in note 5) are those that in managements view need to be disclosed by virtue of their size or incidence.
Critical accounting estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience
and various other factors believed to be reasonable under the circumstances. Actual results in the future may differ from estimates upon which
financial information has been prepared. These underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if
these are also affected. The estimates and assumptions that affect the current year or have a significant risk of causing a material adjustment within the
next financial year are discussed below.
a
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and intangible assets
with indefinite economic lives are tested for impairment annually and at other times when such indicators exist. The recoverable amount of cashgenerating units have been determined based on value-in-use calculations. These calculations require the use of estimates as disclosed in note 16.
Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.
b
Pensions and other post-retirement benefits
The cost of defined benefit pension plans and other post-employment medical benefits is determined using actuarial valuations. The actuarial valuation
involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension
increases. Due to the long-term nature of these schemes, such estimates are subject to significant uncertainty. These assumptions are based on each
schemes specific factors and are reviewed by management at the end of each year. Any difference between these assumptions and the actual outcome
will impact future net assets and net income. The assumptions as of 31 December 2015 are set out in note 31.
c
Impairment of available-for-sale financial assets
The Group classifies certain financial assets as available-for-sale and recognises movements in their fair value in equity. When the fair value declines,
management makes assumptions about the decline in value, whether it is significant or prolonged, to determine whether it is an impairment that should
be recognised in the income statement. The assumptions as of 31 December 2015 are set out in note 16.
d
Investment in associates
The Group owns 13.55 per cent of the equity of IB OpCo Holding S.L. (Iberia) and 86.26 per cent of the equity of Avios Group (AGL) Limited (AGL).
BA uses the equity method of accounting for its investments in these entities because under IFRS it is considered to have significant influence but not
control. Significant influence is defined as the power to participate in the financial and operating policy decisions of the investee butis not control or
joint control. BA has significant influence over Iberia due to its representation on the IAG Management Committee, the management committee of
Iberias ultimate parent company. BA has significant influence over AGL due to representation on the AGL board as provided for by the governance
agreement, but not control as BA no longer has the power to direct the activities of AGL.
e
Passenger revenue recognition
Passenger revenue is recognised when the transportation service is provided. Ticket sales that are not expected to be used for transportation ('unused
tickets') are recognised as revenue using estimates regarding the timing of recognition based on the terms and conditions of the ticket and historical
trends.
In respect of customer loyalty programmes, the fair value attributed to awarded points is deferred as a liability and is recognised as revenue on
redemption of the points and provision of service to the participants to whom the points are issued. The fair value of the award credits is estimated by
reference to the fair value of the awards for which the points could be redeemed and is reduced to take into account the proportion of award credits
that are not expected to be redeemed by customers. The Group exercises its judgement in determining the assumptions to be adopted in respect of
the number of points not expected to be redeemed through the use of statistical modelling and historical trends and in determining the mix and fair
value of the award credits.
f
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income
taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which
such determination is made. The assumptions as of 31 December 2015 are set out in note 10.
g
Residual values and useful lives of assets
The Group exercises judgement to determine useful lives and residual values of property, plant and equipment. The assets are depreciated to their
residual values over their estimated useful lives.
26
Critical accounting estimates and judgements continued

h
Lease classification
A lease is classified as a finance lease when substantially all the risk and rewards of ownership are transferred to the Group. In determining the
appropriate classification, the substance of the transaction rather than the legal form is considered. Factors considered include but are not limited to
the following: whether the lease transfers ownership of the asset to the lessee by the end of the lease term; the lessee has the option to purchase the
asset at the price that is sufficiently lower than the fair value on exercise date; the lease term is for the major part of the economic life of the asset and
the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset.
i
The Group has a number of maintenance contracts with service providers to repair or replace engine parts. These agreements are complex and the
Group exercises judgement in determining the assumptions used to match the consumption of replacement spares and other costs associated with
fleet maintenance with the appropriate income statement charge.
Impact of new International Financial Reporting Standards
The Group has adopted the following interpretation for the first time in the financial year beginning 1 January 2015:
a
IFRIC 21 Levies
IFRIC 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs.
For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be anticipated before the specified
minimum threshold is reached. This interpretation has no impact on the Group as it has applied the recognition principles under IAS 37 Provisions,
Contingent Liabilities and Contingent Assets consistent with the requirements of IFRIC 21 in prior years.
Other standards, amendments and interpretations which are effective for the financial year beginning on 1 January 2015 are not material to the Group.
New standards, amendments and interpretations not yet effective
The IASB and IFRIC issued the following standards, amendments and interpretations with an effective date after the year end of these financial
statements which management believe could impact the Group in future periods. Unless otherwise stated, the Group plans to adopt the following
standards, interpretations and amendments:
IFRS 9 Financial instruments (not yet endorsed by the EU); effective for periods beginning on or after January 1, 2018. The standard removes the
multiple classification and measurement models for financial assets required by IAS 39 and introduces a model that has only two classification
categories: amortised cost and fair value. Classification is driven by the business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets. The accounting and presentation for financial liabilities and for derecognising financial instruments is relocated
from IAS 39 without any significant changes. IFRS 9 (2010) introduces additional changes relating to financial liabilities. IFRS 9 adds new requirements
to address the impairment of financial assets and hedge accounting. The Group is currently assessing the impact of the new standard.
IFRS 15 Revenue from contracts with customers (not yet endorsed by the EU); effective for periods beginning on or after January 1, 2018. The standard
establishes a new five-step model that will apply to revenue arising from contracts with customers. Revenue is recognised at an amount that reflects
the consideration to which an entity expects to be entitled in exchange for those goods or services. The principles in IFRS 15 provide a more
structured approach to measuring and recognising revenue. This is a converged standard on revenue recognition which replaces IAS 18 Revenue, IAS
11 Construction contracts and related interpretations. The Group is currently assessing the impact of the new standard.
IFRS 16 Leases (not yet endorsed by the EU); effective for periods beginning on or after January 1 2019. Under IFRS 16, a contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The new standard
eliminates the classification of leases as either operating leases or finance leases and instead introduces a single lessee accounting model. Applying this
model, lessees are required to recognise a lease liability reflecting the obligation to make future lease payments and a right-of-use asset for virtually all
lease contracts. IFRS 16 includes an optional exemption for certain short-term leases and leases of low-value assets. The Group is currently assessing
the impact of the new standard.
IAS 19 (Amendment) Employee benefits; effective for periods beginning on or after February 1, 2015 in the European Union. The amendment applies
to contributions from employees or third parties to defined benefit plans and clarifies the treatment of such contributions. The amendment
distinguishes between contributions that are linked to service only in the period in which they arise and those linked to service in more than one period.
The objective of the amendment is to simplify the accounting for contributions that are independent of the number of years of employee service, for
example employee contributions that are calculated according to a fixed percentage of salary. Entities with plans that require contributions that vary
with service will be required to recognise the benefit of those contributions over employees working lives. It is anticipated that the application of this
amendment will have no significant impact on the Groups net profit or net assets.
There are no other standards, amendments or interpretations in issue but not yet adopted that the Directors anticipate will have a material effect on
the reported income, net assets or disclosures of the Group.
The Group has not early adopted any standard, amendment or interpretation that has been issued but is not yet effective.
27
Segment information
Business segments
The Groups network passenger and cargo operations are managed as a single business unit. The Leadership Team makes resource allocation decisions
based on route profitability, which considers aircraft type and route economics, based primarily by reference to passenger economics with limited
reference to cargo demand. The objective in making resource allocation decisions is to optimise consolidated financial results. While the operations of
certain subsidiaries are considered to be separate operating segments, their activities are considered to be sufficiently similar in nature to aggregate all
segments. The primary financial information reviewed by the Leadership Team is based on the consolidated results of the Group. Based on the way the
Group manages its operating business, and the manner in which resource allocation decisions are made, the Group has only one reportable segment for
financial reporting purposes, being the consolidated results of the Groups airline operations.
b
Geographical analysis - by area of original sale

Group
2015
2014
UK
5,498
5,492
USA
million
2,165
2,131
Rest of the world
3,670
4,096
Revenue
11,333
11,719
The total of non-current assets excluding available-for-sale financial assets, employee benefit assets, other non-current assets and derivative financial
instruments located in the UK is 10,718 million (2014: 8,897 million) and the total of these non-current assets located in other countries is 162
million (2014: 123 million).
Exceptional items
Exceptional items are those that in management's view need to be disclosed by virtue of their size or incidence. The following items are deemed to be
exceptional:
Group
2015
million
Settlement of litigation provisions
(25)
Exceptional items
(25)
2014
The exceptional item noted above relate to the following consolidated income statement category:
Group
2015
million
(25)
Exceptional items
(25)
2014
The litigation provision represents the continuation of the civil claims brought against BA in 2006. This provision represents a settled case against the
Company in the cargo claim, for a total of 25 million. The final amount required to pay the remaining claims detailed in note 32 is subject to significant
uncertainty.
28
Expenses by nature
Operating profit is arrived at after charging:

Depreciation, amortisation and impairment of non-current assets:
Group
2015
2014
Owned assets
514
581
Finance leased aircraft
189
192
32
46
million
Other leasehold interests

Impairment charge on property, plant and equipment
Amortisation of intangible assets

22
12
761
831
Operating lease costs:

Group
million
2015
2014
113
80
94
100
Property and equipment sub-lease rentals received
(18)
(18)
Operating lease costs
189
162
Minimum lease rentals - aircraft

- property and equipment
Cost of inventories:
Group
million
Cost of inventories recognised as an expense, mainly fuel
2015
2014
2,563
3,310
Auditors remuneration
Group
'000
2015
2014
Fees payable to the Group's auditor for the audit of the Group's accounts
1,514
1,523
Audit of the Group's subsidiaries pursulant to legislation - UK
186
231
Audit of the Group's subsidiaries pursulant to legislation - Worldwide
109
114
Other services pusuant to legislation
269
212
Other services relating to taxation
46
80
Other assurance services
53
69
Fees payable to the Group's auditor for the audit of the Group's pension schemes
15
Other services relating to pension schemes
97
Fees payable to the Group's auditor and its associates for other services:
2,289
2,238
The audit fees payable to Ernst & Young LLP are approved by the BA Board having been reviewed in the context of other companies for cost
effectiveness. The Board also reviews and approves the nature and extent of non-audit services to ensure that independence is maintained.
Remuneration receivable by the Companys auditors for the supply of other services to the Company is not presented separately as this information is
included in the Group auditors remuneration.
29
Employee costs and numbers
Employee costs
The average number of persons employed during the year was as follows:
Group
Company
2015
2014
2015
2014
38,796
36,989
4,754
38,085
5,035
3,723
35,694
4,174
43,550
43,120
40,712
39,868
million
2015
2014
2015
2014
Wages and salaries
1,626
1,601
1,544
1,499
165
Number
UK
Overseas
Social security costs
173
178
163
Costs related to pension scheme benefits (note 31)
245
216
242
210
Other employee costs
422
427
411
409
2,466
2,422
39
2,360
27
27
2,283
39
2,493
2,461
2,387
2,322
Total employee costs excluding restructuring

Restructuring
Total employee costs
Included in 'wages and salaries' is a total expense for share-based payments of 10 million (2014: 11 million) that arises from transactions accounted for
as equity-settled share-based payment transactions (see note 29).
Other employee costs include allowances and accommodation for crew.
b
Directors emoluments
Group
million
Directors' remuneration
2015
2014
During the year, two Directors (2014: two) of the Company were employed and remunerated by IAG.
The aggregate emoluments for the highest paid Director were borne by IAG. The highest paid Director's aggregate emoluments for the year
amounted to 4,024,000 (2014: 3,886,000) and contributions to the Company's defined benefit scheme amounted to nil (2014: nil). The value of
the accrued benefits in respect of his pension scheme at 31 December 2015 amounted to 3,773,000 (2014: 3,375,000).
During the year no Directors (2014: none) accrued benefits under a defined benefit pension scheme and two Directors (2014: three) accrued benefits
under a defined contribution pension scheme. Pension contributions for the year totalled less than 1 million which are included in the table above.
Six Directors (2014: six) participated in IAG's Long Term Incentive Schemes and during the year all six Directors exercised their awards (2014: six). In
addition, one Director (2014: two) exercised their rights under the British Airways Share Option Plans.
c
Remuneration of key management personnel
Compensation of key management personnel (which includes the Directors and Leadership Team of the Group but excludes the aggregate
emoluments of the highest paid director):
Group and Company
2015
2014
Short-term employee benefits
At 31 December
11
million
30
Finance costs and income
Finance costs
Group
2015
2014
On bank loans
(16)
(20)
On finance leases
(92)
(81)
million
(39)
(40)
(147)
(141)
(2)
(3)
Capitalised interest1
Change in fair value of cross currency swaps
(147)
(141)
On other loans
Interest expense
Unwinding of discounting on provisions (note 25)
Finance costs
1
Interest costs on progress payments are capitalised at a rate based on the London Interbank Offered Rate (LIBOR) plus the rate specific to the borrowings.
Finance income
Group
million
Bank interest receivable (total interest income for financial assets not at fair value through the income statement)
10
a
2015
2014
24
17
Tax
Tax on profit on ordinary activities
Tax charge in the income statement
Group
million
2015
2014
191
108
16
Current income tax

UK corporation tax
Overseas tax
Current tax adjustments in respect of prior years - UK corporation tax
Current tax adjustments in respect of prior years - overseas tax
Total current income tax charge
196
125
(9)
Deferred tax arising on differences between the accounting and tax treatment of:
Employee defined benefit plans
(3)
(2)
80
Advance corporation tax

Tax losses utilised
19
Foreign exchange
(13)
(2)
Fuel volatility
(13)
(6)
Employee related provisions
(29)
Adjustments in respect of prior years
(13)
Effect of tax rate changes
(59)
(8)
Other items
Total deferred tax (credit)/charge
(76)
32
Total charge in the income statement
120
157
31
10
Tax continued
Tax on profit on ordinary activities continued
Tax charge/(credit) in other comprehensive income or directly in equity
Group
million
2015
2014
(55)
(64)
(5)
(5)
92
(90)
Foreign exchange
(4)
(7)
Net change on fair value cash flow hedges
46
(176)
Current tax related to items credited to statement of other comprehensive income

Current tax related to items credited to statement of changes in equity
Share-based payments in issue
Deferred tax relating to items charged/(credited) to statement of other comprehensive income
Effect of tax rate changes
19
Deferred tax relating to items credited to statement of changes in equity

Share-based payments in issue
Total tax charge/(credit) relating to items reported in other comprehensive income or directly in equity
76
(323)
1 In
2015 the effect of tax rate changes on items that will not be re-classified to the income statement was nil (2014: 6 million charge) and the effect on items that may be
re-classified to the income statement was nil (2014: 13 million charge).
Reconciliation of the total tax charge

Group
million
2015
2014
Profit before tax from continuing operations
2,628
859
532
185
(30)
(9)
Accounting profit multiplied by standard rate of corporation tax in the UK of 20.25 per cent (2014: 21.5 per cent)
Effects of:
Tax on associates' profits and dividends
Non taxable dividends
(1)
Euro preferred securities accounted for as non-controlling interests
(3)
(4)
Current year losses not recognised
Non-deductible expenses
Gain on disposal of AGL
(311)
Pension fund accounting
(6)
(4)
(8)
(13)
(2)
Disposal and write down of investments

Adjustments in respect of prior years
Impact of changes in substantively enacted tax rates
Other non-deductible expenses
Tax charge in the income statement
32
(59)
120
157
10
Tax continued
Deferred tax provision
The deferred tax liability included in the balance sheet as a result of differences between the accounting and tax treatment is as follows:
Group
Company
2015
2014
2015
2014
619
665
510
543
(107)
(195)
(101)
(190)
(5)
10
(68)
(66)
(68)
(66)
(123)
(159)
(123)
(159)
(7)
(9)
(7)
(9)
Hedging ineffectiveness on open fuel contracts
(14)
(1)
(14)
(1)
Other items
(13)
(19)
(6)
(8)
As at 31 December
282
222
193
120
million
Exchange differences on funding liabilities
Tax losses carried forward
Fair value losses recognised on cash flow hedges
Movement in provision
Group
Company
2015
2014
2015
2014
Balance at 1 January
222
444
120
327
Deferred tax (credit)/charge relating to income statement
(77)
32
(64)
45
Deferred tax charge/(credit) taken to statement of other comprehensive income
134
(254)
135
(253)
193
120
million
Deferred tax charge taken to statement of changes in equity
Transfer on de-consolidation of subsidiary
As at 31 December
282
222
Other taxes
The Group also contributed tax revenues through payment of transaction and payroll related taxes. A breakdown of these other taxes paid is as
follows:
Group
2015
2014
UK Air Passenger Duty
649
646
Other ticket taxes
385
371
Payroll related taxes
173
178
1,207
1,195
million
Total
The UK Government announced the following changes that impact the amount of UK Air Passenger Duty paid: As of 1 April 2015, the number of UK
Air Passenger Duty destination bands was reduced from four to two. Child exemption from Air Passenger Duty was extended to include children
under the age of 12 travelling in the lowest class of travel from 1 May 2015, and from 1 March 2016 the exemption will be extended to include children
under 16 on the date of the flight, in the lowest class of travel.
In line with the rate of inflation, Band B increased by 2 and 4 for reduced and standard rate APD respectively with effect from 1 April 2015.
33
10
Tax continued
Factors that may affect future tax charges

Group
million
2015
2014
112
116
Unrecognised deferred tax assets

Overseas corporate income tax losses as their utilisation is not currently anticipated
The following unrecognised losses are unlikely to be used in the foreseeable future in the ordinary course of business operations:
7
250
255
74
100
Capital losses arising after the change in ownership of the Group in 2011
Capital losses arising on the disposal of properties that were historically eligible for Industrial Buildings Allowances1
Net unrecognised deferred tax asset
Capital losses arising before the change in ownership of the Group in 20112
1
Assumes properties will be realised at their residual values
Available for offset against certain future chargeable gains subject to the tax legislation in relation to pre-entry losses
The future capital gains would be offset against the capital losses arising before the change in ownership of the Group in 2011
Further reductions in the UK corporation tax rate were substantively enacted in the year. The main rate of corporation tax was reduced from 20% to
19% effective from 1 April 2017 and from 19% to 18% effective from 1 April 2020. The provision for deferred tax on temporary differences as at 31
December 2015 was calculated at the rate applicable to the year in which the temporary differences are expected to reverse and the impact is shown
in note 10a.
11
Dividends
Company
million
2015
First interim dividend for 2015:

A1 Ordinary shares: 208.92 per share (2014: nil)
187
21
B Ordinary shares: 1 per share (2014: nil)1
C Ordinary shares: 208.92 per share (2014: nil)
31
Second interim dividend for 2015:

16
C Ordinary shares: 17.48 per share (2014: nil)
260
1
Dividends declared in respect of the B class ordinary shares remained payable at 31 December 2015.
34
2014
12
Group
Group
million
Fleet
Property
Equipment
Total
13,970
1,515
823
16,308
Additions
1,304
47
73
1,424
Disposals
(456)
(2)
(3)
(461)
14,821
1,560
893
17,274
Additions
920
38
48
1,006
Disposals
(735)
(1)
(29)
(765)
Reclassifications
(134)
14,872
1,597
912
17,381
7,514
699
608
8,821
730
54
35
819
Cost
Reclassifications
Balance as at 31 December 2014
(134)
Depreciation and impairment

Charge for the year
Disposals
(353)
(1)
(2)
(356)
7,891
752
641
9,284
654
43
38
735
(19)
(685)
Charge for the year

Disposals
(666)
Reclassifications
(73)
(73)
7,806
795
660
9,261
31 December 2015
7,066
802
252
8,120
31 December 2014
6,930
808
252
7,990
Owned
3,066
768
183
4,017
Finance leased
3,853
3,859
147
34
63
244
7,066
802
252
8,120
Owned
3,148
743
159
4,050
Finance leased
3,664
3,672
118
65
85
268
6,930
808
252
7,990
Net book amounts
Analysis as at 31 December 2015
Progress payments
Progress payments
Group
2015
2014
Freehold
249
248
Long-leasehold improvements
282
282
Short-leasehold improvements
271
278
As at 31 December
802
808
million
The net book amount of property comprises:
Short-leasehold improvements relate to leasehold interests with a duration of less than 50 years.
At 31 December 2015, bank and other loans of the Group are secured on fleet assets with a cost of 1,069 million (2014: 920 million) and letters of
credit of 230 million in favour of the British Airways Pension Trustees are secured on certain aircraft (2014: 230 million).
35
12
Property, plant and equipment continued
Company
Company
million
Fleet
Property
Equipment
Total
15,609
Cost
13,411
1,428
770
Additions
1,283
46
67
1,396
Disposals
(454)
(2)
(1)
(457)
14,243
1,472
836
16,551
Additions
920
37
44
1,001
Disposals
(735)
(1)
(6)
(742)
Reclassifications
(134)
Reclassifications
(134)
14,294
1,508
874
16,676
7,245
652
577
8,474
Depreciation and impairment

702
52
29
783
Disposals
(350)
(1)
(1)
(352)
7,597
703
605
8,905
623
40
Charge for the year
Charge for the year

Disposals
(666)
Reclassifications
36
699
(6)
(672)
(73)
7,481
(73)
743
635
8,859
Net book amounts

31 December 2015
6,813
765
239
7,817
31 December 2014
6,646
769
231
7,646
Owned
2,824
731
170
3,725
Finance leased
3,842
3,848
Progress payments
147
34
63
244
6,813
765
239
7,817
Owned
2,878
704
138
3,720
Finance leased
3,650
3,658
118
65
85
268
6,646
769
231
7,646
Progress payments
Company
2015
2014
Freehold
211
209
Long-leasehold improvements
282
282
million
The net book amount of property comprises:
Short-leasehold improvements
272
278
As at 31 December
765
769
Short-leasehold improvements relate to leasehold interests with a duration of less than 50 years.
At 31 December 2015, bank and other loans of the Company are secured on fleet assets with a cost of 769 million (2014: 600 million) and letters of
credit of 230 million in favour of the British Airways Pension Trustees are secured on certain aircraft (2014: 230 million).
36
13
Capital expenditure commitments
Capital expenditure authorised and contracted for but not provided for in the accounts amounts to 6,458 million for the Group (2014: 6,658 million)
and 6,454 million for the Company (2014: 6,651 million). The majority of capital expenditure commitments are denominated in US dollars, as such
the commitments are subject to exchange movements.
The outstanding commitments include 6,420 million for the acquisition of 18 Airbus A350s (from 2018 to 2021), 29 Boeing 787s (from 2016 to 2021),
26 Airbus A320s (from 2016 to 2022), two Airbus A380s (in 2016), ten Airbus A321s (from 2018 to 2019) and two Embraer E190s (in 2016).
14
The non-current assets held for sale of 4 million in the Group and the Company represent three Boeing 737-400 airframes and nine Boeing 737-400
engines that have been stood down from use and are being marketed for sale. These are held at cost less accumulated depreciation and impairment.
Total impairment charges recognised in the income statement relating to those assets during the year was 4 million (2014: nil).
At 31 December 2014, the non-current assets held for sale of 5 million in the Group and the Company consisted of six Boeing 737-400 engines.
15
Intangible assets
Group
Group
million
Goodwill
Landing rights
Emissions
allowances
40
728
26
Software
Total
311
1,105
Cost
Additions
81
(2)
Exchange differences
40
727
26
392
77
77
(20)
(7)
(27)
Additions
Disposals
(3)
40
724
82
(2)
1,185
(3)
6
462
1,232
164
224
12
12
176
236
Amortisation
60

Charge for the year
60

Charge for the year
22
22
Disposals
(6)
(6)
(1)
59
(1)
192
251
Net book amounts

31 December 2015
40
665
270
981
31 December 2014
40
667
26
216
949
Amortisation on non-EU based landing rights was less than 1 million for the period.
37
15
Intangible assets continued
Company
Company
million
Landing rights
Emissions
allowances
Software
Total
691
26
310
1,027
81
82
391
1,109
77
77
(20)
(7)
(27)
461
1,159
163
212
12
12
175
224
Cost
Additions
692
26
Additions
Disposals
692
Amortisation
49

Charge for the year
49

Charge for the year
22
22
Disposals
(6)
(6)
191
240
49
Net book amounts

31 December 2015
643
270
919
31 December 2014
643
26
216
885
16
Impairment of property, plant, equipment and intangible assets
An annual impairment review is conducted on all intangible assets that have an indefinite economic life. Goodwill and landing rights based within the EU
are considered to have an indefinite economic life. The impairment review is carried out at the level of a cash-generating unit (CGU), defined as the
smallest identifiable group of assets, liabilities and associated intangible assets that generate cash inflows that are largely independent of the cash flows
from other assets or groups of assets. On this basis, an impairment review has been conducted on two CGUs. An impairment review was performed on
the network airline operations CGU, including passenger and cargo operations out of all operated airports, as well as all related ancillary operations as it
contains both goodwill and landing rights within the EU. A separate impairment review has been conducted on the operations of the OpenSkies CGU
as it contains landing rights within the EU.
An impairment review involves the comparison of the carrying value of the CGU to the recoverable amount. An impairment charge is recognised to the
extent that the carrying value exceeds the recoverable amount.
a
Network airline operations

2014
2015
million
Network airline operations
Emissions
allowances
Landing
rights
Goodwill
646
40
Total
Emissions
allowances
Landing
rights
Goodwill
Total
692
26
646
40
712
The recoverable amount of the network airline operations has been measured based on its value in use, using a discounted cash flow model. Cash flow
projections are based on the business plan approved by the Board covering a five-year period. Cash flows beyond the five-year period are projected to
increase in line with the long-term growth rate of the main economies in which BA operates. The pre-tax discount rate applied to the cash flow
projections is derived from the Groups post-tax weighted average cost of capital, adjusted for tax and the risks specific to the assets.
No impairment charge has arisen as a result of the review performed on the network airline operations. No reasonable possible change in the key
assumptions for the network airline operation would cause the carrying amount of goodwill and intangible assets with indefinite economic life to
exceed the recoverable amount.
38
16
Impairment of property, plant, equipment and intangible assets continued
Network airline operations continued
Key assumptions
2015
2014
Pre-tax discount rate (derived from the long-term weighted average cost of capital)
8.6%
10.0%
Long-term growth rate
2.5%
2.5%
OpenSkies
2014
2015
million
Landing rights
Total
Landing rights
Total
19
19
21
21
Carrying value of OpenSkies intangible assets
Included within total intangible assets allocated to the OpenSkies CGU are 16 million (2014: 18 million) of indefinite life intangible assets.
The recoverable amount of the OpenSkies CGU has been measured on its value in use, using a discounted cash flow model. Cash flow projections are
based on the forecast approved by the Board covering a three-year period. Cash flows for the next two years have been projected in line with
expected growth using the latest forecast approved by the Board. This includes consideration of historic and future growth in the countries that
OpenSkies operates. Cash flows beyond the five-year period are projected to increase in line with the long-term growth rate of the main economies in
which OpenSkies operates. The pre-tax discount rate applied to the cash flow projections is derived from OpenSkies post-tax weighted average cost
of capital, adjusted for tax and the risks specific to the assets.
The impairment review of OpenSkies resulted in no impairment during the year (2014: no impairment).
The recoverable amount of the assets within OpenSkies exceeds the carrying value by 5 million (2014: 3 million). If the discount rate were increased
by 135 basis points (2014: 70 basis points) or the operating margin were to decrease by 30 per cent (2014: 8 per cent), the headroom would reduce to
nil.
Key assumptions
2015
2014
Pre-tax discount rate (derived from the long-term weighted average cost of capital)
9.4%
Long-term growth rate
1.7%
10.0%
2.0%
The operating margins of both CGUs are based on the estimated effects of planned business efficiency and business change programmes, approved
and enacted at the balance sheet date. The trading environment is subject to both regulatory and competitive pressures that can have a material effect
on the operating performance of the business.
c
Impairment of fleet
During the year ended 31 December 2015 three Boeing 737-400 airframes and nine Boeing 737-400 engines were written down to their net realisable
value and an impairment charge of 4 million was recognised. All were classed as held for sale as at 31 December 2015.
39
17
Investments
Group
Investment in associates
Group
million
Additions
2015
2014
76
115
1,569
(6)
Share of attributable results

Share of movements on other reserves
149
39
(1)
(72)
Dividends received
(12)
As at 31 December
1,775
Percentage of equity
Measurement basis
owned
(6)
76
Principal
activities
Holding
Country of incorporation and

principal operations
IB Opco Holding S.L ('Iberia')
13.55
Equity method
Airline
operations
Ordinary
shares
Spain
Avios Group (AGL) Limited ('AGL')
86.26
Equity method
Airline
marketing
Ordinary
shares
England
Held by a subsidiary company
The following summarised financial information of the Groups investment in associates is shown below:
Group
2015
2014
Non-current assets
2,498
2,433
Current assets
million
2,890
1,541
Current liabilities
(2,802)
(1,705)
Non-current liabilities
(1,642)
(1,770)
944
499
1,768
68
Net equity
Group's carrying amount of the investment
1,775
76
4,028
3,228
(3,735)
(3,544)
Other income and costs (including tax)
256
594
Net profit after tax
549
278
Goodwill attributable to investments in associates

Total investment in associate
Revenues
Operating costs
Other comprehensive income
(9)
Total comprehensive income for the year (net of tax)
540
278
While the Group holds less than 20 per cent of the issued share capital of Iberia, it accounts for its investment in Iberia as an associate as it has the
ability to exercise significant influence over the investment due to its voting power (both through its equity holding and its representation on key
decision-making committees) and the nature of its commercial relationships with Iberia.
On 28 January 2015, BA entered into a business transfer agreement with its wholly-owned subsidiary Avios Group (AGL) Limited (AGL). This
transferred certain parts of the BA Executive Club business, relating to the frequent flyer programme, to AGL in return for additional shares in the
amount of 1.6 billion fully paid up Class A Shares in AGL.
40
17
Investments continued
Group continued
Following the restructure, BAs shareholding has reduced from 100% of the existing AGL business to 86% of the larger combined customer loyalty
business, whilst retaining the economic benefit of ownership through dividend distribution. As a result BA no longer has the power to affect the returns
of AGL as it now falls within the governance structure of IAG.
From 28 January 2015, AGL was derecognised as a subsidiary of BA and recognised as an associate at the fair value of the retained interest. On initial
recognition the investment in AGL was measured at 1.6 billion with a gain measured on loss of control of a subsidiary of 1.5 billion. The investment
value recognised on 28 January 2015 was determined by an independent third partys assessment of the value of the new larger AGL loyalty business.
The gain is not considered to be distributable as consideration was received in the form of shares. The effect of the disposal is detailed below:
AGL
million
2015
Fair value of shares issued
1,569
Total consideration on disposal
1,569
Assets/(liabilities) at disposal date

12
Intangible assets
Other assets
299
(276)
Net assets
36
Profit on disposal
1,533
Company
A summary of the Companys investments in subsidiaries is set out below:

Company
million
Total
Total
Cost
Provisions
2015
2014
2,278
(952)
1,326
2,453
(11)
(11)
(9)
Additions
10
(89)
89
(7)
(7)
(99)
2,185
(870)
1,315
1,326
Disposals
Provision
As at 31 December
(1,029)
BA has de-recognised several investments in subsidiaries during the year following liquidation. The net carrying value after provisions on these investments at the date of
liquidation was less than 1 million.
2 The prior year charge of 99 million related mainly to the 89 million impairment in the Companys investment in AGL as the recoverable amount of the existing customer
loyalty programme, which excluded the BA Executive Club and the Iberia Plus programmes, which was expected to be lower than the carrying value of the investment.
The Group and Company's principal investments in subsidiaries, associates and other investments are listed on pages 73 and 75.
18

Group
million
2015
2014
Company
2015
2014
Listed securities
International Consolidated Airlines Group S.A.
15
Unlisted securities (see note 27b)
40
44
40
44
47
63
40
48
Comair Limited
41
19
Trade receivables and other assets
Other non-current assets are set out below:

Group
million
Prepayments and accrued income
Other debtors
Amounts owed by fellow group undertakings
2015
2014
14
17
63
52
263
340
2014
52
61
263
Amounts owed by subsidiaries

Company
2015
69
126
134
441
195
Trade receivables and other current assets are set out below:
Group
Company
2015
2014
2015
2014
Trade receivables
556
550
542
535
Provision for doubtful receivables
(15)
(19)
(15)
(19)
Net trade receivables
541
531
527
516
Prepayments and accrued income
454
255
339
153
131
71
132
74
million
Other debtors
Amounts owed by fellow group undertakings
29
29

Trade receivables and other current assets
1,155
857
260
243
1,287
986
The ageing analysis of trade receivables is as follows:

Group
Company
2015
2014
2015
2014
492
456
478
442
< 30 days
25
33
25
32
30 - 60 days
12
12
12
12
million
Neither past due nor impaired
Past due but not impaired:
> 60 days
Net trade receivables
Trade receivables are generally non-interest-bearing and on 30 days terms.
42
12
30
12
30
541
531
527
516
20
Cash, cash equivalents and other current interest-bearing deposits

Group
million
Cash at bank and in hand
Company
2015
2014
2015
2014
848
649
790
594
25
Short-term deposits falling due within three months

Other current interest-bearing deposits maturing after three months
25
848
674
790
619
1,199
1,849
1,199
1,849
Cash at bank is primarily held in AAA money market funds and bank deposits. Short-term deposits are made for periods up to three months
depending on the cash requirements of the Group and earn interest based on the floating deposit rates. The fair value of cash and cash equivalents is
848 million for the Group (2014: 674 million) and 790 million for the Company (2014: 619 million).
At 31 December 2015, the Group and Company had no outstanding bank overdrafts (2014: nil).
Other current interest-bearing deposits are made for periods in excess of three months with maturity typically within twelve months and earn
interest based on the market rates available at the time the deposit was made.
At 31 December 2015 cash and cash equivalents includes 53 million of restricted cash in Nigeria.
b
Reconciliation of net cash flow to movement in net debt

Group
million
2015
Increase in cash and cash equivalents from continuing operations
2014
34
175
(12)
Net cash flow used in discontinued operations

(650)
629
592
734
New loans and finance leases taken out and hire purchase arrangements made
(488)
(1,391)
Increase in net debt resulting from cash flow
(371)
(6)
(66)
(52)
(Decrease)/increase in other current interest-bearing deposits

Net cash outflow from decrease in debt and lease financing
Exchange differences and other non-cash movements
(437)
(58)
Net debt at 1 January
(2,026)
(1,968)
Net debt as at 31 December
(2,463)
(2,026)
Increase in net debt during the year
Net debt is calculated as total cash and cash equivalents and current interest bearing deposits less total interest bearing borrowings.
21

Group
million
Trade creditors
2014
2015
971
911
922
867
1,541
1,699
Amounts owed to subsidiary companies

Other creditors
Other taxation and social security
Dividends payable
Accruals and deferred income
As at 31 December
2014
512
514
507
509
33
34
32
32
Sales in advance of carriage
Company
2015
2,503
1,572
2,390
177
1,189
166
1,475
1,013
4,197
4,220
5,559
5,595
Includes deferred income from customer loyalty programmes of 76 million (2014: 1,015 million) for the Group and 69 million (2014: 869 million) for the Company.
22
Other non-current liabilities

Group
Company
2015
2014
2015
2014
Accruals and deferred income
62
90
36
60
As at 31 December
62
90
36
60
million
43
23
Long-term borrowings
Group
million
2015
2014
Company
2015
2014
Current
Bank and other loans
396
112
327
71
Finance leases
332
316
353
335
26
15
728
428
706
421
Loans from subsidiaries

As at 31 December
Non-current

Finance leases
480
570
325
352
3,302
3,551
3,361
3,632
334
370
3,782
4,121
4,020
4,354
Loans from subsidiaries

As at 31 December
Bank and other loans are repayable up to 2027. Bank and other loans of the Group amounting to 592 million (2014: 425 million) and bank loans of the Company
amounting to 368 million (2014: 166 million) are secured on aircraft. Finance leases and hire purchase arrangements are all secured on aircraft or other property, plant and
equipment.
Included in finance leases for the Company is 86 million (2014: 107 million) of finance leases with subsidiaries of the Group, of which 24 million (2014: 21 million) is
classified as current.

Group
Company
2015
2014
2015
2014
250
249
250
249
Floating rate sterling mortgage loans secured on aircraft (ii)
40
98
17
70
Floating rate US dollar mortgage loans secured on aircraft (iii)
38
53
38
49
239
47
million
250 million fixed rate 8.75 per cent eurobonds 2016 (i)
Fixed rate sterling mortgage loans secured on aircraft (iv)

Floating rate euro mortgage loan secured on aircraft (v)
Fixed rate Chinese yuan mortgage loans secured on aircraft (vi)
74
91
239
47
74
Fixed rate US dollar mortgage loan secured on aircraft (vii)

European Investment Bank sterling loans secured on property (viii)
Fixed rate unsecured US dollar mortgage loan (ix)
74
127
136
29
29
876
682
652
Less: current instalments due on bank and other loans
396
112
327
423
71
Non-current bank and other loans as at 31 December
480
570
325
352
(i) 250 million fixed rate 8.75 per cent unsecured eurobonds 2016 are repayable in one instalment on 23 August 2016.
(ii) Floating rate sterling mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 1.10 per cent and 1.27 per
cent. The loans are repayable between 2016 and 2019.
(iii) Floating rate US dollar mortgage loans are secured on specific aircraft assets of the Group and bear interest between 1.31 per cent and 2.99 per
(iv) Fixed rate sterling mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 6.14 per cent and 6.30 per
(v) The floating rate euro mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 0.43 per cent and 1.50 per
cent. The loan is repayable between 2024 and 2027.
(vi) Fixed rate Chinese yuan mortgage loans are secured on specific aircraft assets of the Group and bear interest of 5.20 per cent. The loans are
repayable in 2022.
(vii) Fixed rate US dollar mortgage loans are secured on specific aircraft assets of the Group. These loans bear interest of between 3.81 per cent and
4.76 per cent and are repayable between 2021 and 2026.
(viii) European Investment Bank sterling loan is secured on certain property assets of the Group and bears interest of 0.71 per cent. The loan is
repayable in 2017.
(ix) Fixed rate US dollar fixed term loan is unsecured. This loan bears interest of 4.22 per cent and is repayable in 2017.
44
23
Long-term borrowings continued
Total loans, finance leases and hire purchase arrangements

Group
Company
2015
2014
US dollar
$246
$295
$57
$76
euro
328
60
328
60
Chinese yuan
716
Sterling
119
198
21
79
626
433
402
174
250
249
250
249
250
249
250
249
million
2015
2014
Loans:
Bank:
716
Fixed rate bonds:

Sterling
Loans from subsidiary undertakings:
US dollar
$209
$233
euro
300
300
360
385
$3,197
Finance leases:
US dollar
euro
Japanese yen
Sterling
As at 31 December
$2,802
$3,209
$2,794
1,170
1,071
1,170
1,071
44,599
37,104
44,599
37,104
656
771
742
878
3,634
3,867
3,714
3,967
4,510
4,549
4,726
4,775
Obligations under finance leases and hire purchase contracts
The Group uses finance leases and hire purchase contracts principally to acquire aircraft. These leases have both renewal options and purchase options
exercisable at the option of the Group. Future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
million
2015
2014
Company
2015
2014
Future minimum payments due:

Within one year
After more than one year but within five years
In five years or more
Less: finance charges
Present value of minimum lease and hire purchase payments
415
408
440
431
1,839
1,788
1,903
1,878
1,810
2,308
1,810
2,308
4,064
4,504
4,153
4,617
430
637
439
650
3,634
3,867
3,714
3,967
The present value of minimum lease and hire purchase payments is analysed as follows:
Within one year
After more than one year but within five years
In five years or more
As at 31 December
45
332
316
353
335
1,611
1,507
1,670
1,588
1,691
2,044
1,691
2,044
3,634
3,867
3,714
3,967
24
Operating lease commitments
The Group has entered into commercial leases on certain properties and aircraft. These leases have durations ranging from five years for aircraft to
130 years for ground leases. Certain leases contain options for renewal.
The aggregate payments for which there are commitments under operating leases fall due as follows:
a
Fleet
Group
million
Within one year
Between one and five years
Over five years
As at 31 December
2015
127
402
116
645
2014
125
415
195
735
Company
2015
98
361
116
575
Property
Group
million
Within one year
Over five years
As at 31 December
2014
118
399
194
711
2015
76
228
1,774
2,078
2014
83
230
1,594
1,907
Company
2015
74
221
1,764
2,059
2014
80
223
1,594
1,897
Sub-leasing
The Group and Company sub-lease surplus rental properties and aircraft assets held under non-cancellable operating leases to third parties and
subsidiary companies. These leases have remaining terms of one to 22 years. Future minimum rentals receivable under non-cancellable operating leases
are as follows:
Group
million
Within one year
Over five years
As at 31 December
2015
3
3
2
8
46
2014
4
4
2
10
Company
2015
3
3
2
8
2014
4
4
2
10
25
Provisions for liabilities

Group
million
Restoration and
handback
Restructuring
Legal claims
Other
42
63
127
21
210
Total

Current
Non-current
19
188
207
42
84
337
Arising during the year
54
36
103
40
233
Utilised
(17)
(43)
(25)
(59)
(144)
Release of unused amounts
(11)
(9)
(1)
(23)
(44)
(1)
Unwinding of discount
1
242
26
23
26
81
42
391
Analysis:
Current
Non-current
219
242
26
80
29
158
13
233
81
42
391
Company
million
Restoration and
handback
Restructuring
Legal claims
Other
Total
42
45
96
11
133
127
42
56
229
30
36
103
38
207
(7)
(43)
(25)
(48)
(123)
(10)
(9)
(1)
(15)
(35)
(1)
30
283

Current
Non-current
Arising during the year

Utilised
Release of unused amounts
Unwinding of discount
6
121
5
1
146
26
26
81
Analysis:
Current
Non-current
144
146
26
80
19
127
11
156
81
30
283
Restoration and handback costs include provision for the costs to meet the contractual return conditions on aircraft held under operating leases. The
provision also includes amounts relating to leased land and buildings where restoration costs are contractually required at the end of the lease. Where
such costs arise as a result of capital expenditure on the leased asset, the restoration costs are also capitalised.
The Group is subject to investigations into cargo and/or passenger fuel surcharges and related litigation in various jurisdictions and during the year 25
million was paid in relation to these (2014: 7 million). The Group has also been subject to multi-party claims from groups of employees on a number of
matters relating to its operations including claims for additional holiday pay and for age discrimination. The final amount required to pay the remaining
claims and fines is subject to uncertainty and is outlined further in note 32.
Following an appeal to the General Court of the European Union, the 2010 European Commission decision on alleged cartel activity was partially
annulled and BA was advised that the 75 million fine would be refunded in full. The refund was received in February 2016. It is not yet clear what the
European Commissions next steps will be. At 31 December 2015, the Group recognised an asset included in Other current assets and an equal
litigation provision, as it is not possible to predict the outcome of the proceedings.
Restructuring provisions represents the estimated costs of settling employee obligations under the Groups restructuring plans.
47
25
Provisions for liabilities continued
Other provisions include: compensation due to customers whose flights were significantly delayed, unless the airline can prove that the delay was
caused by circumstances beyond its control; a provision for the EU Emissions Trading Scheme that represents the excess of BA's CO2 emitted on a
flight within the EU in excess of the EU Emission Allowances granted; and provisions relating to unfavourable contracts.
26
Financial risk management objectives and policies
The Group is exposed to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and fuel price risk), credit risk, capital
risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group's financial performance.
Group Treasury carries out financial risk management under governance approved by the Board and the IAG Management Committee. Group Treasury
identifies, evaluates and hedges financial risks. The Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and investment of excess liquidity.
a
Fuel price risk
The Group is exposed to fuel price risk. The Group's fuel price risk management strategy aims to provide the airline with protection against sudden and
significant increases in oil prices while ensuring that the airline is not competitively disadvantaged in the event of a substantial fall in the price of fuel.
The current Group strategy, as approved by the IAG Management Committee, is to hedge between 60 per cent and 100 per cent of fuel consumption
for the next quarter; an average of 45 per cent between quarters two and five (with an average flexibility of plus 15/minus ten per cent); and between
nil and 30 per cent between quarters six and eight, with the flexibility to hedge up to 20 per cent in quarters nine to twelve.
In implementing the strategy, the fuel risk management programme allows for the use of a number of derivatives available on the over-the-counter
(OTC) markets with approved counterparties and within approved limits.
The following table demonstrates the sensitivity of financial instruments to a reasonably possible change in fuel prices, with all other variables held
constant, on profit before tax and equity:
Group and Company
2014
2015
Increase/(decrease) in
fuel price
per cent
30
(30)
Effect on profit before

tax
million
Effect on equity
million
Increase/(decrease)
Increase/(decrease)
50
(36)
306
(358)
Increase/(decrease) in
fuel price
per cent
30
(30)
48
Effect on profit before

tax
million
Effect on equity
million
Increase/(decrease)
Increase/(decrease)
(6)
8
496
(508)
26
Financial risk management objectives and policies continued
Foreign currency risk
The Group is exposed to currency risk on revenue, purchases and borrowings that are denominated in a currency other than sterling. The currencies in
which these transactions are primarily denominated are US dollar, euro, Japanese yen and Chinese yuan. The Group generates a surplus in most
currencies in which it does business. The US dollar is an exception as capital expenditure, debt repayments and fuel payments denominated in US
dollars normally create a deficit.
The Group can experience adverse or beneficial effects arising from foreign exchange rate movements. The Group seeks to reduce foreign exchange
exposures arising from transactions in various currencies through a policy of matching, as far as possible, receipts and payments in each individual
currency. Surpluses of convertible currencies are sold, either spot or forward, for US dollars or pounds sterling. Forward foreign exchange contracts
and currency options are used to cover near-term future revenues and operating payments in a variety of currencies.
The Group utilises its US dollar, euro, yen and yuan debt repayments as a hedge of future US dollar, euro, yen and yuan revenues.
The following table demonstrates the sensitivity of financial instruments to a reasonably possible change in the US dollar, euro, yen and yuan exchange
rates, with all other variables held constant, on profit/(loss) before tax and equity. These represent both the Group and the Company as the majority of
the foreign currency risks are borne by the Company.
Strengthening/(weakening)
in US dollar rate
per cent
Effect on
profit
before tax
million
Effect on
equity
million
Increase /(decrease)
Strengthening/(weakening)
in euro rate
Effect on equity
per cent
Effect on
profit
before tax
million
Group
2015
10
(10)
(162)
160
10
(10)
32
(32)
(135)
135
2014
10
(10)
(2)
2
(158)
154
10
(10)
2
(2)
(127)
120
Strengthening/
(weakening)
in yen rate
Effect on
profit
before tax
Effect on
equity
Strengthening/
(weakening)
in yuan rate
Effect on
profit
before tax
Effect on
equity
million
per cent
million
million
per cent
million
million
Group
2015
10
(10)
(23)
23
10
(10)
2014
10
(10)
(2)
2
(7)
7
(19)
19
Interest rate risk
The Group is exposed to changes in interest rates on floating rate debt and cash deposits. Interest rate risk on borrowings is managed through
determining the right balance of fixed and floating debt within the financing structure. Market conditions are considered when determining the desired
balance of fixed and floating rate debt. Had there been a 50 basis point increase in interest rates, there would have been less than 1 million adverse
(2014: 1 million favourable) impact on the Group and Companys shareholders equity and income statement. A 50 basis point decrease in interest
rates would have resulted in less than 1 million favourable (2014: 1 million adverse) impact on shareholders equity and the income statement for both
the Group and the Company.
49
26
Counterparty risk
The Group is exposed to counterparty risk to the extent of non-performance by its counterparties in respect of financial assets receivable. However,
the Group has policies and procedures in place to ensure credit risk is limited by placing credit limits on each counterparty. The Group continuously
monitors counterparty credit limits and defaults of counterparties, incorporating this information into credit risk controls. Treasury activities, which
include placing money market deposits, fuel hedging and foreign currency transactions could lead to a concentration of different credit risks on the
same counterparty. This risk is managed by the allocation of an overall exposure limit for the counterparty that is then allocated down to specific
treasury activities for that party. Exposures at the activity level are monitored on a daily basis and the overall exposure limit for the counterparty is
reviewed at least monthly in light of available market information such as credit ratings and credit default swap levels. It is the Groups policy that all
counterparties who wish to trade on credit terms are subject to credit verification procedures.
The maximum exposure to credit risk is limited to the carrying value of each class of asset as summarised in note 27.
The Group does not hold any collateral to mitigate this exposure. Credit risks arising from acting as guarantor are disclosed in note 32.
e
Liquidity risk
The Companys liquidity risk management includes maintaining sufficient cash and interest-bearing deposits, the availability of funding from an adequate
amount of credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, Group Treasury
maintains flexibility in funding by maintaining availability under committed credit lines.
The Companys long-term corporate debt ratings as at 31 December 2015 assigned by Moodys and Standard and Poors, respectively, were Ba2 and
BB. The Group has adequate cash reserves to meet operating requirements for the next 12 months.
The stability of the liquidity position is maintained through the Group having no financial covenants or material adverse change clauses in its drawn and
undrawn debt facilities. In addition, fuel and currency hedging is carried out on an open credit basis with no collateralisation or margin call requirements.
At 31 December 2015 the Group and Company had unused overdraft facilities of 10 million (2014: 10 million).
The Group and Company held undrawn uncommitted money market lines of 25 million as at 31 December 2015 (2014: 25 million).
The Group and Company had the following undrawn general and committed aircraft financing facilities:
31 December 2015
million
US dollar facility expiring September 2016
US dollar facility expiring October 2016
US dollar facility expiring December 2016
US dollar facility expiring June 2022
Currency
equivalent
$322
$509
$416
$1,164
$1,750
216
341
279
780
1,173
31 December 2014
Currency
million

Euro facility expiring November 2015
Renminbi facility expiring November 2015
US dollar facility expiring September 2016
50
equivalent
$805
515
262
RMB750
$644
$509
$1,164
206
77
412
325
745
26
Liquidity risk continued
The table below analyses the Groups financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet
date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and include interest.
Group
million
Within 6
months
6 - 12 months
1 - 2 years
2 - 5 years
More than 5
years
Total 2015
Financial assets
848
848
1,014
Trade receivables
541
232
185
1,199
31
263
541
110
224
334
10
69
Derivative financial instruments:

Forward currency contracts
Currency option contracts
34
23
Financial liabilities
Interest-bearing loans and borrowings:
Finance lease and hire purchase obligations
(185)
(231)
(504)
(1,335)
(1,809)
Fixed rate borrowings
(31)
(323)
(82)
(123)
(59)
(618)
Floating rate borrowings
(45)
(38)
(37)
(74)
(151)
(345)
(1,548)
(4,064)
(1,548)
Other long-term liabilities
(3)
(3)

Fuel derivatives
As at 31 December
(1)
(2)
(378)
(1)
(168)
(85)
(16)
(647)
482
(520)
(591)
(1,323)
(2,019)
2 - 5 years
More than 5
years
(3,971)
Group
million
Within 6
months
6 - 12 months
1 - 2 years
Total 2014
Financial assets
Trade receivables
674
674
1,213
636
1,849
531
531
84
84
52
52
18
84

38
28
(207)
(201)
(411)
(1,377)
(2,308)
(4,504)
(28)
(38)
(340)
(97)
(56)
(559)
(29)
(54)
(62)
(34)
(33)
(1,505)
(212)
(1,505)

Fuel derivatives
As at 31 December
(447)
(244)
(139)
325
130
(882)
51
(830)
(1,508)
(2,397)
(4,332)
26
Liquidity risk continued
The table below analyses the Companys financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and include interest.
Company
million
Within 6
months
6 - 12 months
1 - 2 years
2 - 5 years
More than 5
years
Total 2015
Financial assets
790
790
1,014
Trade receivables
527
483
185
1,199
46
529
527
135
293
10
37
465

34
23
69
2
(196)
(244)
(530)
(1,373)
(1,810)
(4,153)
(42)
(290)
(82)
(153)
(550)
(1,117)
(34)
(37)
(32)
(65)
(151)
(3,028)
(319)
(3,028)

Fuel derivatives
As at 31 December
(1)
(2)
(378)
(1)
(168)
(85)
(16)
(647)
(830)
(484)
(584)
(1,313)
(2,474)
(5,685)
Company
million
Within 6
months
6 - 12 months
1 - 2 years
2 - 5 years
More than 5
years
Total 2014
Financial assets
619
619
1,213
636
1,849
Trade receivables
516
516
353
353
195
195
18
84

38
28
(218)
(213)
(436)
(1,442)
(2,308)
(4,617)
(30)
(30)
(317)
(117)
(603)
(1,097)
(21)
(52)
(52)
(20)
(34)
(3,132)
(179)
(3,132)

Fuel derivatives
As at 31 December
(447)
(244)
(139)
(1,108)
128
(731)
52
(830)
(1,579)
(2,945)
(6,235)
26
Offsetting financial assets and liabilities
The Group enters into derivative transactions under master netting agreements. In general, under such agreements the amounts owed by each
counterparty on a single day in respect of all transactions outstanding are aggregated into a single net amount that is payable by one party to the other.
In certain circumstances, for example when a credit event such as a default occurs, all outstanding transactions under the agreement are terminated.
The termination value is assessed and only a single amount is payable in settlement of all transactions.
Certain transactions do not meet the criteria for offsetting in the balance sheet. This is because the Group does not have any current legally
enforceable right to offset recognised amounts, because the right to offset is enforceable only on the occurrence of future events such as a default on
the bank loans or other credit events.
The following table sets out the carrying amounts of derivatives recognised in the Group and Company balance sheets that are subject to the above.
Group and Company
million
Gross value of
financial
instruments
Financial
instruments that
are offset under
netting
agreements
69
4
12
(2)
(12)
85
(14)
(2)
(2)
(659)
2
12
(647)
(647)
(663)
14
(649)
(649)
(578)
(578)
31 December 2015
Financial assets
- Forward currency contracts
- Currency option contracts
- Fuel derivatives
- Fuel derivatives
(578)
Net amounts of
financial
instruments in
the balance
sheet
Related financial
instruments that
are not offset
Net amount
69
2
69
2
71
71
(2)
(2)
Group and Company
million
Gross value of
financial
instruments
31 December 2014
Financial assets
- Fuel derivatives
- Fuel derivatives
84
4
4
(4)
92
Net amounts of
financial
instruments in
the balance
sheet
Related financial
instruments that
are not offset
Net amount
84
4
84
4
(4)
88
88
(834)
(830)
(830)
(834)
(830)
(830)
(742)
(742)
(742)
Financial
instruments that
are offset under
netting
agreements
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio (adjusted net debt as a percentage of total capital
adjusted for operating leases). Net debt is defined as the total borrowings, finance leases and hire purchase liabilities, net interest-bearing deposits and
cash and cash equivalents less overdrafts. Total capital is defined as the total of share capital and share premium (see note 28), reserves (see note 30a),
non-controlling interests (see note 30a) and net debt (see note 20b).
53
27
Financial instruments
Financial assets and liabilities by category
The detail of the Group's financial instruments as at 31 December 2015 and 31 December 2014 by nature and classification for measurement purposes
is as follows:
At 31 December 2015
Financial assets
million
Loans and
receivables
Group
Derivatives used
for hedging
Available for sale
Non-financial
assets
Total carrying
amount
Non-current financial assets

47

47
12
12
326
14
340
Current financial assets

Trade receivables
541
541

59
59
259
355
614
1,199
1,199
848
848
Within the Company, total other non-current assets are 441 million, all of which are classified as loans and receivables. Total other current assets in the Company were
760 million, of which 519 million were considered loans and receivables and 241 million were non-financial assets.
Group
Loans and
payables
million
Derivatives used
for hedging
Non-financial
liabilities
Total carrying
amount
Non-current financial liabilities

3,782
3,782
101
101
59
62
2,649
4,197
Current financial liabilities

728
728
1,548
548
548
Within the Company, total other long-term liabilities were 36 million, all of which are classified as non-financial liabilities. Total trade and other payables in the Company
were 5,559 million, of which 3,028 million were loans and payables and 2,531 million were non-financial liabilities.
54
27
Financial instruments continued
Financial assets and liabilities by category continued
At 31 December 2014
Financial assets
million
Loans and
receivables
Derivatives used
for hedging
Group
Available for sale
Non-financial
assets
Total carrying
amount
Non-current financial assets
63

63
18
18
52
17
69
Current financial assets

Trade receivables
531
531
70

70
84
242
326
1,849
1,849
674
674
Within the Company, total other non-current assets are 195 million, all of which are classified as loans and receivables. Total other current assets in the Company were
470 million, of which 328 million were considered loans and receivables and 142 million were non-financial assets.
Loans and
payables
million
Group
Derivatives used
for hedging
Non-financial
liabilities
Total carrying
amount
Non-current financial liabilities

4,121
4,121
139
139
86
90
2,715
4,220
Current financial liabilities

428
428
1,505
691
691
Within the Company, total other long-term liabilities were 60 million, all of which are classified as non-financial liabilities. Total trade and other payables in the Company
were 5,595 million, of which 3,132 million were loans and payables and 2,463 million were non-financial liabilities.
55
27
Fair values of financial assets and financial liabilities
The fair values of the Groups financial instruments are disclosed in hierarchy levels depending on the nature of the inputs used in determining the fair
values as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3: Inputs for the asset or liability that are not based on observable market data.
The carrying amounts and fair values of the Group's financial assets and liabilities as at 31 December 2015 are set out below:
Group
million
Level 1
Level 2
Level 3
Fair value
Carrying value
Total
Total
Financial assets:

40
47
47
69
69
69
3,829
3,829
3,634
379
640
545
331
331
331
647
647
647
Financial liabilities:
261

Fuel derivatives
Within the Company, available-for-sale financial assets of 40 million are fair valued at 40 million (Level 3), finance lease and hire purchase obligations of 3,714 million
are fair valued at 3,886 million (Level 2), fixed rate borrowings of 494 million are fair valued at 526 million (Level 1: 261 million and Level 2: 265 million) and floating
rate borrowings of 299 million are fair valued at 299 million (Level 2).
Current portion of derivative financial assets is 59 million.
Current portion of derivative financial liabilities is 548 million.
The carrying amounts and fair values of the Group's financial assets and liabilities as at 31 December 2014 are set out below:
Group
million
Level 1
Level 2
Level 3
Fair value
Carrying value
Total
Total
Financial assets:
63
63
19
84
44
84
84
4,101
4,101
3,867
247
520
476
206
206
206
Financial liabilities:
273

Cross currency swaps
Fuel derivatives
830
830
830
Within the Company, available-for-sale financial assets of 48 million are fair valued at 48 million (Level 1: 4 million and Level 3: 44 million), finance lease and hire
purchase obligations of 3,967 million are fair valued at 4,211 million (Level 2), fixed rate borrowings of 634 million are fair valued at 674 million (Level 1: 508 million and
Level 2: 166 million) and floating rate borrowings of 174 million are fair valued at 174 million (Level 2).
Current portion of derivative financial assets is 70 million.
Current portion of derivative financial liabilities is 691 million.
56
27
Fair values of financial assets and financial liabilities continued
The fair value of financial assets and liabilities is included at the amount at which the Group would expect to receive upon selling an asset or pay to
transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of cash and cash equivalents, other
current interest bearing deposits, trade receivables, other current assets and trade and other payables approximate their carrying amounts largely due
to the short-term maturities of these instruments.
The following methods and assumptions were used by the Group in estimating its fair value disclosures for financial instruments:
Available-for-sale financial assets and loan notes
Listed fixed asset investments (Level 1) are stated at market value as at 31 December 2015. For unquoted investments (Level 3) where the fair value
cannot be measured reliably, the investment is stated at historic cost less accumulated impairment losses.
Forward currency transactions and over-the-counter (OTC) fuel derivatives
These derivatives are entered into with various counter-parties, principally financial institutions with investment grade ratings. These are measured at
the market value of instruments with similar terms and conditions at the balance sheet date (Level 2) using forward pricing models. Changes in
counterparty and own credit risk are deemed to be not significant.
Bank and other loans, finance leases, hire purchase arrangements and the non-Japanese yen denominated portions of hire purchase arrangements
carrying fixed rates of interest
The fair value of the Groups interest-bearing borrowings and loans including leases, are determined by discounting the remaining contractual cashflows at the relevant market interest rates as at 31 December 2015 (Level 2).
Euro-sterling bond 2016
This is stated at quoted market value (Level 1).
There have been no transfers between levels of the fair value hierarchy during the period. Out of the financial instruments listed in the table above,
only the interest-bearing loans and borrowings are not measured at fair value on a recurring basis.
c
Level 3 financial assets reconciliation
The following table summarises key movements in Level 3 financial assets:

Group
Company
2015
2014
2015
44
10
44
10
Repayment of loan notes (classified as available-for-sale financial assets)
(4)
(5)
(4)
(5)
million
Interest accrued on loan notes (classified as available-for-sale financial assets)

1
Fair value uplift on available-for-sale financial asset

As at 31 December
40
2014
38
38
44
40
During 2014 certain shareholders disposed of their combined interest in The Airline Group Limited, allowing the Group to estimate the fair value of the investment held
which resulted in a fair value uplift of 38 million in the year ended 31 December 2014. The re-measurement was recognised in the statement of other comprehensive
income as available-for-sale financial assets marked to market.
1
57
44
27
Cash flow hedges
At 31 December 2015 the Group and Company had four principal risk management activities that were designated as hedges of future forecast
transactions. These were:
A hedge of a proportion of future long-term revenue receipts by future debt repayments in foreign currency, hedging future foreign exchange risk;
A hedge of certain short-term revenue receipts by foreign exchange contracts, hedging future foreign exchange risk;
A hedge of certain short-term foreign currency operational payments by forward exchange contracts, hedging future foreign exchange risk; and
A hedge of future jet fuel purchases by forward crude, gas oil and jet kerosene derivative contracts, hedging future fuel price risk.
To the extent that the hedges were assessed as highly effective, a summary of the amounts included in equity and the periods in which the related cash
flows are expected to occur are summarised below:
Group and Company

Within 6
months
6-12 months
1-2 years
2-5 years
More than 5
years
11
24
19
(7)
Forward contracts to hedge future payments
(32)
(23)
(9)
(1)
Hedges of future fuel purchases
378
186
67
351
174
82
26
million
Debt repayments to hedge future revenue
Related deferred tax (credit)
Total
2015
52
(65)
639
(7)
626
(128)
Total amount included within equity
498
Notional value of financial instruments used as cash flow hedging instruments:

Group and
Company
Notional
amount
million
To hedge future currency revenues against euro
160
To hedge future operating payments in US dollars
$1,551

$3,111
- US dollars
- euro
$3,061
1,498
- yen
41,698
- yuan
716
Company
The Company undertakes hedging activities on behalf of other companies within the Group and performs the treasury activities of the Group centrally.
As a result, the disclosures above apply to the Company as for the Group.
58
27
Cash flow hedges continued
Group and Company

million
Within 6
months
6-12 months
1-2 years
2-5 years
More than 5
years
12
12
39
(35)
(40)
(30)
(17)
451
276
156
423
251
151

Forward contracts to hedge future payments
Total
2014
33
(87)
883
39
(35)
Related deferred tax (credit)
829
(165)
Total amount included within equity
664
Notional value of financial instruments used as cash flow hedging instruments:

Group
Notional
amount
$730
million
To hedge future currency revenues against US dollars
To hedge future operating payments in US dollars
$1,483

$4,090
- US dollars
$3,307
- euro
1,130
- yen
34,335
The ineffective portion recognised in the income statement that arose from hedges of future fuel purchases amounts to a loss of 54 million (2014:
37 million). There was no ineffective portion of cash flow hedges other than hedges of future fuel purchases.
28
Share capital and share premium

Group and Company
2014
2015
Number of
shares 000s
million
Number of
shares 000s
million
Share capital allotted, called up and fully paid

A1 Ordinary shares of 289.70 each
A2 Ordinary shares of 289.70 each
B Ordinary shares of 1 each
C Ordinary shares of 1 each
897
99
1,000
148
260
29
1
897
99
1,000
148
260
29
1
As at 31 December
2,144
290
2,144
290
Group and Company

million
2015
2014
Share premium as at 31 December
1,512
1,512
The A1 and A2 class ordinary shareholders have full voting and economic rights in accordance with the percentage of shares held. The B class ordinary
shareholders have full voting rights in accordance with the percentage of shares held, however have minimal economic rights attached to them. The C
class ordinary shareholders have full economic rights in accordance with the percentage of shares held, however are non-voting.
59
29
Share options
The Group operates share-based payment schemes as part of the total remuneration package provided to employees. These schemes comprise both
share option schemes where employees acquire shares at a grant price and share award plans whereby shares are issued to employees at no cost,
subject to the achievement of specified performance targets by the BA Group for BA granted options and by the IAG Group for IAG granted shares.
The share-based payments charge has been recorded as part of employee costs (note 8) in the income statement as follows:
million
IPSP and IDBP schemes recharged from IAG (b)
Total share-based payments charge recorded in employee costs
2015
10
2014
11
10
11
BA granted schemes
The British Airways Share Option Plan 1999 (SOP) granted options to qualifying employees based on performance at an option price which was not
less than the market price of the share at the date of the grant (or the nominal value if shares are to be subscribed and this value is greater than the
market value). The options are subject to a three year vesting period with the exception of grants made during the year to 31 March 2005, when there
was a single re-test after a further year which measured performance of BA over the four year period from the date of grant. Upon vesting, options
may be exercised at any time until the 10th anniversary of the date of grant. No further grants of options under the SOP have been made since 2005.
At 31 December 2015 there are no awards outstanding.
The British Airways Deferred Share Plan 2005 (DSP) was granted to qualifying employees based on performance and service tests. It will be awarded
when an incentive award is triggered subject to the employee remaining in employment with the Group for three years after the grant date. The
relevant population received a percentage of their incentive award in cash and the remaining percentage in shares through the DSP. The maximum
deferral is 50 per cent.
Outstanding options from BA granted schemes are set out below:
Options with an exercise price
2015
2014
million
As at 1 January
Exercised during the year
Expired/cancelled
1
(1)
3
(2)
As at 31 December
Of which exercisable
The average share price at the date of exercise for options exercised was 5.50 (2014: 4.13).
The weighted average remaining life of options is zero months (2014: six months).
The shares outstanding at the year-end have an exercise price of 2.76 (2014: 2.76).
BA settles all options exercised with IAG shares, held on the balance sheet as available-for-sale financial assets. The Group monitors the number of
listed IAG ordinary shares held against the exposure to exercisable options, investing in additional shares at appropriate intervals. At 31 December
2015, an insignificant number of shares were held (2014: 1 million).
b
IPSP and IDBP schemes recharged from IAG
BA participates in two IAG share-based payment schemes, with awards to BA employees being made in plans operated by IAG that represent rights
over its ordinary shares. The costs of these awards are recharged from IAG based on their determination of award fair values. The amount outstanding
at the year end is disclosed in note 33 (related party transactions). A brief description of the schemes is set out below:
i)
IAG Performance Share Plan
In 2011 the Group introduced the IAG Performance Share Plan, granted to senior executives and managers of the Group who are most directly
involved in shaping and delivering business success over the medium to long term. For 2011 to 2014, a conditional award of shares is subject to the
achievement of a variety of performance conditions, which will vest after three years subject to the employee remaining employed by the Group. From
2015, the award was made as nil-cost options, and also had a two-year additional holding period after the end of the performance period, before
vesting takes place. The awards made between 2012 and 2014 will vest based 50 per cent on achievement of IAGs TSR performance targets relative
to the MSCI European Transportation Index, and 50 per cent based on achievement of earnings per share targets. The award made in 2015 will vest
based one-third on achievement of IAGs TSR performance targets relative to the MSCI European Transportation Index, one-third based on
achievement of earnings per share targets, and one-third based on achievement of return on invested capital targets.
ii)
IAG Incentive Award Deferral Plan
In 2011 the Group introduced the IAG Incentive Award Deferral Plan (IADP), granted to qualifying employees based on performance and service tests.
It will be awarded when an incentive award is triggered subject to the employee remaining in employment with the Group for three years after the
grant date. The relevant population will receive 50 per cent of their incentive award up front in cash, and the remaining 50 per cent in shares after
three years through the IADP.
60
30
a
Other reserves and non-controlling interests

Group
Group
Retained
earnings
million
387
686

Profit for the year
Unrealised
gains and
losses
Currency
translation
Total
Noncontrolling
interests
33
33
453
686
200
16
(5)
Fair value of cash flow hedges transferred to passenger revenue
17
(5)
17
Fair value of cash flow hedges transferred to fuel and oil costs
56
32
56
32
(958)
(958)
(72)
46
(9)
46
(9)
Exchange losses
Fair value of cash flow hedges transferred to currency differences

Net change in fair value of cash flow hedges2
Share of movements in reserves of associates
(72)

Available-for-sale financial assets recycled to the income statement
(467)
(4)
Pension remeasurements
Cost of share-based payments
Income tax
(467)
(4)
153
170
323
296
(646)
(5)
683
(613)
28
(16)

Total income and expense for the year
Profit for the year
2,493
Exchange losses
(9)

Fair value of cash flow hedges transferred to fuel and oil costs2
Fair value of cash flow hedges transferred to losses on fuel derivatives2
Share of movement in reserves of associates
14
44
44
(106)
(106)
(684)
(684)
(8)
(8)
(1)
1
152
(2)
Income tax
(34)
15
(9)
940
152
200
14
98
2,493
940
(1)
(355)
(2)
(42)
(76)
(260)
(260)
(15)
2,348
159
(9)
2,498
3,031
(454)
19
2,596
200
Non-controlling interests comprise 300 million of 6.75 per cent fixed coupon euro perpetual preferred securities issued by British Airways Finance (Jersey) L.P. in which
the general partner is British Airways Holdings Limited, a wholly-owned subsidiary of the Company. The holders of these securities have no rights against Group
undertakings other than the issuing entity and, to the extent prescribed by the subordinated guarantee, the Company. In the event of a dividend paid by the Company, the
coupon payment is guaranteed. The effect of the securities on the Group as a whole, taking into account the subordinated guarantee and other surrounding arrangements,
is that the obligations to transfer economic benefits in connection with the securities do not go beyond those that would normally attach to preference shares issued by a
UK company. Refer to note 26g for the disclosure of the Groups Capital risk management.
2
Significant fair value losses relate to the impact of the average decline in fuel price during the year on fuel derivative contracts outstanding as of 31 December 2015.
Amounts transferred to the income statement represent the release of fair value losses on fuel derivative contracts on settlement of those contracts. The amounts held in
equity and the period in which cash flows are expected to occur are summarised in note 27d.
Retained earnings
The retained earnings reserve represents the accumulated retained profits of the Group and includes the undistributable gain on the disposal of the BA
Executive Club of 1.5 billion.
Unrealised gains and losses
The unrealised gains and losses reserve records fair value changes on available-for-sale investments and the portion of the gain or loss on a hedging
instrument in a cash flow hedge that is determined to be an effective hedge.
Currency translation reserve
The currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries
and associates.
61
30
Other reserves and non-controlling interests continued
Company
Company
Retained
earnings
million
443
483

Profit for the year
Fair value of cash flow hedges transferred to fuel and oil costs
Net change in fair value of cash flow hedges
Income tax
Profit for the year
463
483
17
56
17
56
32
(958)
32
(958)
38
(1)
38
(1)
(454)
(4)
151
176
170
(646)
619
(626)
2,395

Fair value of cash flow hedges transferred to fuel and oil costs1
Fair value of cash flow hedges transferred to losses on fuel derivatives1

Income tax
(7)
14
14
940
940
44
44
(106)
(106)
(688)
(688)
(1)
(1)
146
321
(470)
2,395
Total
20
(454)
(4)
Unrealised
gains and
losses
1
146
(2)
(2)
(260)
(260)
(35)
(42)
(77)
2,244
162
2,406
2,863
(464)
2,399
Significant fair value losses relate to the impact of the average decline in fuel price during the year on fuel derivative contracts outstanding as of 31 December 2015.
Amounts transferred to the income statement represent the release of fair value losses on fuel derivative contracts on settlement of those contracts. The amounts held in
equity and the period in which cash flows are expected to occur are summarised in note 27d.
See note 30a for a description of the reserves.
31
Employee benefits
The Company operates two principal funded defined benefit pension schemes, the Airways Pension Scheme (APS) and the New Airways Pension
Scheme (NAPS), both of which are in the UK and are closed to new members. APS has been closed to new members since 1984 and NAPS closed to
new members in 2003. The Companys principal defined contribution scheme is the British Airways Retirement Plan (BARP), of which all new
permanent employees over the age of 16 employed by the Company and certain subsidiary undertakings in the UK may become members.
Benefits provided under APS are based on final average pensionable pay and, for the majority of members, are subject to inflationary increases in
payment in line with the Annual Review Orders (ARO) issued by the Government, which are based on the Consumer Price Index (CPI). Benefits
provided under NAPS are based on final average pensionable pay reduced by an amount (the abatement) not exceeding one and a half times the
Government's lower earnings limit. NAPS pension increases are also linked to the ARO and increases are capped at a maximum of five per cent in any
one year. In NAPS, annual pensionable pay increases for active members are capped at RPI.
The Trustees of APS have purported to grant an additional discretionary increase above CPI inflation for the 2013/14 pensions in payment. This would
be expected to reduce the APS accounting surplus by 12 million. BA has challenged the decision as it considers the Trustees have no power to grant
such increases and it is concerned about the actuarial funding position of the scheme. BA is also concerned about the residual unhedged risk in the
scheme, which will be increased by the addition of new unfunded benefits, to which BA may ultimately be exposed as the principal employer and
sponsor of the scheme. BA is committed to an existing recovery plan, which sees deficit payments of 55 million per annum until March 2023. Legal
proceedings, initiated by BA, are underway to determine the legitimacy of the additional discretionary increase. This discretionary increase has not
been reflected in the accounting assumptions used.
62
31
APS and NAPS are governed by separate Trustee Boards. Although APS and NAPS have separate Trustee Boards, much of the business of the two
Schemes is common. Most Main Board and Committee meetings are held in tandem, although each Trustee Board reaches its decisions independently.
There are three Committees which are separately responsible for the governance, operation and investments of each Scheme. British Airways Pension
Trustees Limited holds the assets of both Schemes on behalf of their respective Trustees.
Deficit payment plans are agreed with the Trustees of each scheme every three years based on the actuarial valuation (the triennial valuation) rather
than the IAS 19 accounting valuation. The latest deficit recovery plan was agreed at 31 March 2012 (see note 31i).
The actuarial valuations performed as at 31 March 2012 are different to the valuation performed under IAS 19 Employee Benefits as of 31 December
2015 due mainly to timing differences of the measurement dates and to the specific scheme assumptions in the actuarial valuation vs. IAS guidance
used in the accounting valuation assumptions, notably the discount rate to calculate the present value of the liabilities.
Most employees engaged outside the UK are covered by appropriate local arrangements. The Company provides certain additional post-retirement
healthcare benefits to eligible employees in the US through the US Post-Retirement Medical Benefit plan (US PRMB).
The defined benefit plans expose the Company to risks, such as longevity risk, interest rate risk, market (investment) risk and currency risk.
Disclosures for post-retirement benefits are presented on a consolidated basis and include a net pension liability of 16 million (2014: 23 million)
relating to British Airways Holidays Limited, with the remainder relating to the Company.
Employee benefit schemes recognised on the balance sheet

million
Scheme assets at fair value
Present value of scheme liabilities
APS
NAPS
Other
Total
7,232
13,126
304
20,662
(20,165)
(6,130)
(13,464)
(571)
Net pension asset/(liability)
1,102
(338)
(267)
Effect of the asset ceiling

Other employee benefit obligations
(409)
693
497
(409)
(338)
(9)
(276)
(9)
79
Represented by:
697

(618)
79
million
Scheme assets at fair value
Net pension asset / (liability)
Other employee benefit obligations
APS
NAPS
Other
Total
7,509
(6,446)
12,750
(13,484)
334
(626)
20,593
(20,556)
1,063
(395)
(734)
(292)
(11)
37
(395)
(11)
(303)
(369)
668
Represented by
(734)
673
(1,042)
(369)
The present value of scheme liabilities for the US PRMB was 45 million at 31 December 2015 (65 million as at 31 December 2014).
APS is in an IAS 19 accounting surplus, which would be available to the Company as a refund upon wind up of the scheme. This refund is restricted due to withholding taxes
that would be payable by the Trustees.
During 2015 the IASB published an exposure draft of amendments to IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding requirements and their
Interaction. The purpose of this proposed amendment is to provide additional clarity on the role of the trustees' rights in an assessment of the recoverability of a surplus on
an employee pension fund. BA is considering the impact of this exposure draft on the APS surplus recognised but has not recognised any adjustments as the amendment
remains in exposure draft form only.
63
31
Pension costs charged/(credited) to the consolidated income statement
Pension costs charged/(credited) to operating profit:

2015
million
Defined benefit plans:
Past service cost
Current service cost
(1)
193
Pension costs recorded as employee costs
164
53
164
50
245
214
192
Defined contribution plans
2014
Includes 2 million (2014: 1 million) relating to the US post-retirement medical benefit plan.
Pension costs charged/(credited) as finance costs:

million
2015
2014
Interest income on scheme assets

Interest expense on scheme liabilities
Interest expense on asset ceiling
750
(745)
(14)
856
(850)
(9)
(9)
(3)
Net financing expense relating to pensions
Remeasurements recognised in the statement of other comprehensive income
million
2015
2014
Return on plan assets excluding interest income

Remeasurement of plan liabilities from changes in financial assumptions
Remeasurement of experience gains
Remeasurement of the APS asset ceiling
(336)
363
134
(9)
1,083
(1,487)
138
(188)
(13)
152
(467)
Fair value of scheme assets
A reconciliation of the opening and closing balances of the fair value of scheme assets is set out below:
million
As at 1 January
Interest income
Return on plan assets excluding interest income
Employer contributions
Employee contributions
Benefits paid
2015
2014
20,593
750
(336)
495
83
(928)
5
18,851
856
1,083
476
86
(764)
5
20,662
20,593
Includes employer contributions to APS of 87 million (2014: 67 million) and to NAPS of 389 million (2014: 396 million), of which deficit funding payments represented
80 million for APS (2014: 61 million) and 283 million for NAPS (2014: 185 million).
2 Cash payments to pension schemes (net of service costs) reflected in the consolidated cash flow statement were 302 million (2014: 312 million), being the employer
contributions of 495 million (2014: 476 million) less the current service cost of 193 million (2014: 164 million) as set out in note 31b.
1
64
31
Fair value of scheme assets continued
Scheme assets as at 31 December comprise:

million
Return seeking investments - equities
UK
Overseas
Return seeking investments - other
Private equity
Property
Alternative investments
Liability matching investments
UK Fixed bonds
Overseas Fixed bonds
UK Index-Linked bonds
Overseas Index-Linked bonds
Other
Derivatives
Insurance contract
Longevity swap
Other
2015
2014
1,987
5,187
7,174
1,967
5,089
7,056
643
1,562
893
3,098
605
1,426
730
2,761
2,880
79
4,850
90
7,899
2,816
161
4,889
109
7,975
856
(83)
1,406
(29)
341
1,051
(201)
1,469
(37)
519
20,662
20,593
All equities and bonds have quoted prices in active markets.
For APS and NAPS, the composition of the scheme assets is:
APS
NAPS
Liability matching investments
1,255
4,451
8,875
3,367
5,706
1,358
168
12,242
Insurance contract and related longevity swap

Other
Fair value of scheme assets
7,232
million
Return seeking investments
APS
NAPS
8,304
3,437
11,741
884
1,348
4,455
5,803
1,415
291
13,126
7,509
12,750
1,009
For both APS and NAPS, the Trustees have ultimate responsibility for decision making on investment matters, including the asset-liability matching
strategy. The latter is a form of investing designed to match the movement in pension plan assets with the movement in projected benefit obligations
over time. The Investment Committee adopts an annual business plan which sets out investment objectives and work required to support achievement
of these objectives. The Investment Committee also deals with the monitoring of performance and activities, including work on developing the
strategic benchmark to improve the risk return profile of the scheme where possible, as well as having a trigger-based dynamic governance process to
be able to take advantage of opportunities as they arise. The Investment Committee reviews the existing investment restrictions, performance
benchmarks and targets, as well as continuing to develop the de-risking and liability hedging portfolio.
The strategic benchmark for asset allocations differentiate between 'return seeking assets' and 'liability matching assets'. Given the respective maturity
of each scheme, the proportion for APS and NAPS vary. At 31 December 2015 the benchmark for APS, expressed as a percentage of the assets
excluding the insurance contract, was 18.7 per cent (2014: 21.2 per cent) in return seeking assets and 81.3 per cent (2014: 78.8 per cent) in liability
matching investments; and for NAPS the benchmark was 68 per cent (2014: 68 per cent) in return seeking assets and 32 per cent (2014: 32 per cent) in
liability matching investments. Bandwidths are set around these strategic benchmarks that allow for tactical asset allocation decisions, providing
parameters for the Investment Committee and its investment managers to work within.
In addition to this, APS has an insurance contract with Rothesay Life which now covers 24 per cent (2014: 24 per cent) of the pensioner liabilities for an
agreed list of members. The insurance contract is based on future increases to pensions in line with RPI inflation and will match future obligations on
that basis for that part of the scheme. The insurance contract can only be used to pay or fund employee benefits under the scheme. APS also has
secured a longevity swap contract with Rothesay Life, which covers an additional 20 per cent (2014: 20 per cent) of the pensioner liabilities for the
same members covered by the insurance contract above. The value of the contract is based on the difference between the value of the payments
expected to be received under this contract and the pensions payable by the scheme under the contract.
Both schemes use derivative instruments for both investment purposes and to manage exposures to financial risks, such as interest rate, foreign
exchange and liquidity risks arising in the normal course of business. Exposure to interest-rate risk is managed through the use of Inflation-Linked Swap
contracts. Foreign exchange forward contracts are entered into to mitigate the risk of currency fluctuations. For NAPS, a strategy exists to provide
protection against the equity market downside risk by reducing some of the upside participation.
65
31
A reconciliation of the opening and closing balances of the present value of the defined benefit obligations is set out below:
million
As at 1 January
Current service cost
Past service cost
Interest expense
Remeasurements financial assumptions
Remeasurements demographic assumptions
Benefits paid
Employee contributions
2015
20,556
193
(1)
745
(363)
(134)
(928)
83
14
2014
18,854
164
As at 31 December
20,165
20,556
850
1,487
(138)
(764)
86
17
The defined benefit obligation comprises 55 million (2014: 75 million) arising from unfunded plans and 20,110 million (2014: 20,481 million) from plans that are wholly or
partly funded.
A reconciliation of the effect of the asset ceiling representing the IAS 19 irrecoverable surplus in APS is set out below:
2015
million
2014
As at 1 January
Interest expense
Remeasurements
395
14
198
9
188
As at 31 December
409
395
Actuarial assumptions
The principal assumptions used for the purposes of the actuarial valuations were as follows:
2014
2015
Per cent per annum
APS
NAPS
Other schemes
APS
NAPS
Other schemes
Discount rate
Rate of increase in pensionable pay
Rate of increase of pensions in payment
RPI rate of inflation
CPI rate of inflation
3.60
2.85
1.85
2.85
1.85
3.85
3.00
2.00
3.00
2.00
3.8 4.4
3.0 4.0
1.5 3.5
3.0 3.1
2.1 3.0
3.45
2.85
1.85
2.85
1.85
3.80
2.95
1.95
2.95
1.95
3.4 4.1
3.5 4.0
1.5 3.5
3.0 3.1
2.1 3.0
Rate of increase in salaries is assumed to be in line with the RPI rate of inflation.
The inflation rate assumptions for NAPS and APS are based on the difference between the yields on index-linked and fixed-interest long-term government bonds. The
inflation assumptions are used to determine the rate of increase for pensions in payment and the rate of increase in deferred pensions where there is such an increase.
It has been assumed that the rate of increase of pensions in payment will be in line with CPI for APS. However, the Trustees have purported to grant an additional
discretionary increase of 20 basis points in relation to 2013/14 payments, a decision that BA has challenged, which has not been reflected in the IAS 19 assumptions and has
commenced legal proceedings to determine the legitimacy of the additional increase.
3
Rate of increase in healthcare costs is based on medical trend rates of 7.0 per cent grading down to 5.0 per cent over nine years (2014: 7.5 per cent to
5.0 per cent over five years).
In the UK, mortality rates are calculated using the standard SAPS mortality tables produced by the CMI for APS and NAPS. The standard mortality
tables were selected based on the actual recent mortality experience of members and were adjusted to allow for future mortality changes. The current
longevities underlying the values of the scheme liabilities were as follows:
UK
2015
Mortality assumptions
Life expectancy at age 60 for a:
- male currently aged 60
- male currently aged 40
- female currently aged 60
- female currently aged 40
28.3
29.9
29.9
32.4
2014
28.3
29.8
29.8
32.3
At 31 December 2015, the weighted-average duration of the defined benefit obligation was 12 years for APS (2014: 12 years) and 19 years for NAPS
(2014: 19 years). In the US, mortality rates were based on the RP-14 mortality tables.
66
31
Sensitivity analysis
Reasonable possible changes at the reporting date to a significant actuarial assumption, holding other assumptions constant, would have affected the
present value of scheme liabilities by the amounts shown:
Increase in net
pension liability
million
327
61
241
572
Discount rate (decrease of 10 basis points)

Future salary growth (increase of 10 basis points)
Future pension growth (increase of 10 basis points)
Future mortality rate - one year increase in life expectancy
Although the analysis does not take into account the full distribution of cash flows expected under the plan, it does provide an approximation of the
sensitivity of the assumptions shown.
Funding
Pension contributions for APS and NAPS were determined by actuarial valuations made at 31 March 2012 using assumptions and methodologies agreed
between the Company and Trustees of each scheme. At the date of the actuarial valuation, the actuarial deficits of APS and NAPS amounted to 680
million and 2,660 million respectively. In order to address the deficits in the schemes, BA has also committed to the following undiscounted deficit
payments:
APS
million
NAPS
Within 12 months
2-5 years
5-10 years
More than 10 years
55
220
124
150
796
1,411
78
Total expected deficit payments for APS and NAPS
399
2,435
The Group has determined that the minimum funding requirements set out above for APS and NAPS will not be restricted. The present value of the
contributions payable is expected to be available as a refund or a reduction in future contributions after they are paid into the plan, subject to
withholding taxes that would be payable by the Trustees. This determination has been made independently for each plan. As such, no additional liability
is required.
Deficit payments in respect of local arrangements outside the UK have been determined in accordance with local practice.
In total, the Group expects to pay 420 million in employer contributions and deficit payments to its post-retirement benefit plans in 2016. This
includes expected employer contributions of 61 million to APS (of which 55 million relates to the funding shortfall) and 340 million to NAPS (of
which 150 million relates to the funding shortfall). This excludes any additional deficit contributions that would be required if BA declares dividends in
future years in excess of payments into the scheme for that year.
67
32
Contingent liabilities and guarantees
Contingent Liabilities
The Group and the Company have contingent liabilities which at 31 December 2015 amounted to 90 million (2014: 66 million). These contingent
liabilities include claims and litigation related to operations and tax affairs.
Regulatory proceedings and litigation

The Group is party to a number of legal proceedings in the English courts relating to a decision by the European Commission in 2010 which fined BA
and ten other airline groups for participating in a cartel in respect of air cargo prices. The decision was partially annulled as against BA following an
appeal to the general court of the European Union and BA was advised that the fine would be refunded in full. It is not yet clear what the European
Commissions next steps will be.
The original decision has led to a large number of claimants seeking, in proceedings brought in the English courts, to recover damages from BA which
they claim arise from the alleged cartel activity. It is not possible at this stage to predict the outcome of the proceedings, which BA will vigorously
defend. BA has joined the other airlines alleged to have participated in cartel activity to these proceedings to contribute to such damages, if any are
awarded.
The Group is also party to similar litigation in a number of other jurisdictions, including Germany, the Netherlands and Canada, together with a number
of other airlines. At present, the outcome of the proceedings is unknown. In each case, the precise effect, if any, of the alleged cartelising activity on
the claimants will need to be assessed.
We are currently unable to determine whether the Group has an existing obligation as a result of the past event.
Taxation
The Group files income and other tax returns in many jurisdictions throughout the world. Various tax authorities are currently examining the Groups
tax returns which contain matters that could be subject to differing interpretations of applicable tax laws and regulations. The resolution of tax
positions through negotiations with relevant tax authorities, or through litigation, can take several years to complete. While it is difficult to predict the
ultimate outcome in some cases, the Group does not anticipate that there will be any material impact on the Groups financial position or results of
operations.
b
Guarantees
Bank guarantees
The Group and Company have issued bank guarantees totalling 35 million (2014: 34 million) and 35 million (2014: 33 million) respectively.
Pensions and perpetual preferred securities

The Group and the Company have provided collaterals on certain payments to the Companys pension scheme, APS, triggered in the event of BAs
insolvency, which at 31 December 2015 amounted to 250 million (2014: 250 million). In addition, a guarantee amounting to 230 million (2014: 230
million) secured by certain aircraft (see note 12) was issued by a third party in favour of APS which is also triggered in the event of insolvency.
The Company has also issued guarantees in respect of the fixed perpetual preferred securities issued by a subsidiary undertaking which amounted to
219 million (2014: 236 million) and in relation to statutory audit exemptions that certain subsidiary companies are taking. See note 30 for details of
the guarantee provided in respect of the fixed perpetual securities and note 35 in respect of the audit exemption guarantee.
68
33
Related party transactions
The Group and Company had transactions in the ordinary course of business during the year ended 31 December 2015 with related parties.
Group
Company
2015
2014
2015
2014
55
41
36
18
38
50
17
13
55
41
36
18
38
50
17
13
Subsidiary undertakings of the parent:

Sales to subsidiary undertakings of the parent
Purchases on behalf of subsidiary undertakings of the parent
Amounts owed by subsidiary undertakings of the parent
Amounts owed to subsidiary undertakings of the parent
37
55
303
48
29
29
8
9
37
55
303
48
29
29
8
9
Associates:
Sales to associates4
Purchases from associates
Amounts owed by associates4
Amounts owed to associates
305
363
40
926
36
136
11
31
305
363
40
926
33
136
8
31
328
163
388
1,987
361
231
391
2,191
million
Parent:
Sales to/purchases on behalf of IAG
Purchases from IAG
Amounts owed by IAG
Amounts owed to IAG
Subsidiaries:
Sales to subsidiaries
Purchases from subsidiaries
Amounts owed to subsidiaries
The transactions between the Group and IAG comprise mainly of a management fee in respect of services provided by IAG and recharges between the entities in
respect of invoices settled on behalf of the other party. Transactions with IAG are carried out on an arms length basis.
Sales and purchases with associates are made at normal market prices and outstanding balances are unsecured and interest free. Cash settlement is expected within
the standard settlement terms.
Outstanding trading balances are placed on inter-company accounts with no specified credit period. Long-term loans owed to and from the Company by subsidiary
undertakings bear market rates of interest.
4 Sales to associates and amounts owed by associates in 2014 included 3 million of Avios sales to Iberia for BA Group.
In addition, costs borne by the Company on behalf of the Groups retirement benefit plans amounted to 5 million in relation to the Pension Protection
Fund levy (2014: 5 million).
Neither the Group nor Company have provided or benefited from any guarantees for any related party receivables or payables. During the year ended
31 December 2015 the Group has not made any provision for doubtful debts relating to amounts owed by related parties (2014: nil).
Directors' and officers' loans and transactions
There were no loans or credit transactions with Directors or Officers of the Company at 31 December 2015 or that arose during the year that need to
be disclosed in accordance with the requirements of Sections 412 and 413 to the Companies Act 2006.
69
34
Post balance sheet event
No other significant events have taken place post the balance sheet date.
35
Subsidiary audit exemption
The following companies are exempt from the requirements relating to the audit of individual accounts for the year ended 31 December 2015 by virtue
of Section 479A of the Companies Act 2006: British Airways Leasing Limited (04150220), BA and AA Holdings Limited (03840072), British Airways
777 Leasing Limited (04954270), BritAir Holdings Limited (03537574), British Airways (BA) Limited (07990613), British Airways Associated Companies
Limited (00590083), BA European Limited (06346489), British Airways Avionic Engineering Limited (02775232), British Airways Interior Engineering
Limited (03109109), British Airways Maintenance Cardiff Limited (02204178), The Plimsoll Line Limited (01967358) and Teleflight Limited (03918190).
70
Operating and financial statistics

Not forming part of the audited financial statements
Year ended 31 December
Total Group continuing operations
2015
2014
2013
Traffic and capacity

Revenue passenger km (RPK)
142,016
138,431
131,333
Available seat km (ASK)
174,274
170,917
161,444
Passenger load factor
81.5
81.0
81.3
Cargo tonne km (CTK)
4,180
4,458
4,646
Total revenue tonne km (RTK)
18,256
18,198
17,767
Total available tonne km (ATK)
25,427
25,185
24,536
Overall load factor
71.8
72.3
72.4
Passengers carried
'000
43,323
41,516
39,960
Tonnes of cargo carried
'000
664
706
733
39,304
39,710
38,592
4,434
4,304
4,183
284
279
278
10.59
10.44
10.61
Operations
Average manpower equivalent (MPE)
ASKs per MPE
Aircraft in service at year end
Aircraft utilisation (average hours per aircraft per day)
Punctuality - within 15 minutes
78
79
76
Regularity
99.1
99.2
98.6
7.71
Financial
Passenger revenue per RPK
7.16
7.55
Passenger revenue per ASK
5.83
6.12
6.27
Cargo revenue per CTK
13.09
13.41
14.82
174.44
301.50
314.84
Operating margin
10.9
8.3
6.2
Operating margin before exceptional items
11.1
8.3
5.7
Earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR)
2,133
1,886
1,515
Net debt/total capital ratio
34.2
48.1
44.5
Total traffic revenue per ATK
42.1
43.9
44.1
Total traffic revenue per ASK
6.1
6.5
6.7
Total expenditure before exceptional items on operations per ASK
5.78
6.29
6.67
Total expenditure before exceptional items on operations excluding fuel per ASK
4.04
4.23
4.35
Total expenditure before exceptional items on operations per ATK
39.6
42.6
43.9
Average fuel price (US cents/US gallon)
Operating statistics do not include those of associate undertakings and franchisees.
71
Fleet table
Number in service with Group companies at 31 December 2015

On Balance Sheet
Off Balance Sheet
Total
Total
Changes since
Future
Options
fixed assets
operating leases
December
2015
December
2014
December 2014
(Notes 2 and 3)
deliveries
(Note 4)
(Note 5)
2
7
26
33
CONTINUING AIRLINE OPERATIONS

Airbus A318
Airbus A319
31
13
44
44
Airbus A320
40
26
66
59
Airbus A321
14
18
18
10
10
(5)
Boeing 747-400
40
40
43
(3)
Boeing 757-200
10
Airbus A330
Airbus A350
Airbus A380
Boeing 737-400
Boeing 767-300
12
12
14
Boeing 777-200
41
46
46
Boeing 777-300
12
12
8
Boeing 787-8
Boeing 787-9
18
36
(2)
1
5
Boeing 787-10
16
12
Embraer E170
Embraer E190
12
11
15
228
56
284
279
87
97
TOTAL CONTINUING OPERATIONS
Notes:
1. Includes those operated by British Airways Plc, BA Cityflyer Limited and OpenSkies SASU.
2. Five Boeing 737-400s, three Boeing 747-400s & two Boeing 767-300 aircraft were stood down from service during the period.
3. Ten Boeing 737-400s, three Boeing 747-400s & two Boeing 767-300 aircraft were disposed of during the period.
4. Future deliveries have increased by three. Seven Airbus A320s, two Airbus A380s, five Boeing 787-900s and one Embraer E190 aircraft were delivered
during the period. Three Embraer E-190 aircraft were ordered, 15 A320 family options were converted into firm orders and three orders for Airbus A320
aircraft were converted to Airbus A321s.
5. Options have decreased by 27. 15 Airbus A320 family options were converted into firm orders, ten 787-9 rolling options expired and two Airbus A320
family options were transferred to another Group airline.
72
Principal investments
At 31 December 2015
Investments in subsidiaries
The following table includes those principal investments which impact the results or assets of the Group.
These subsidiaries are wholly-owned except where indicated.
BA and AA Holdings Limited
Principal activities
Country of
incorporation and
registration and
Holding company
England
Airline operations
Holding company
Aircraft financing
Aircraft maintenance
Aircraft financing
Airline finance
Package holidays
Aircraft financing
Airline operations
Airline operations
Insurance
Holding company
England
England
England
England
Bermuda
Jersey
England
England
England
England
England
France
Bermuda
England
Percentage of
equity owned
Country of
incorporation and
Avios Group (AGL) Limited

IB Opco Holding S.L
86.26
13.55
Airline marketing
Airline operations
England
Spain
Dunwoody Airline Services (Holdings) Limited
40.00
Holding company
England
Percentage of
equity owned
Country of
incorporation and
BA Cityflyer Limited
BritAir Holdings Limited
British Airways 777 Leasing Limited
British Airways Avionic Engineering Limited
British Airways Ejets Leasing Limited
British Airways Holdings Limited
British Airways Holidays Limited
British Airways Interior Engineering Limited
British Airways Leasing Limited
British Airways Maintenance Cardiff Limited
British Midland Airways Limited
OpenSkies SASU
Speedbird Insurance Company Limited
The Plimsoll Line Limited
Investments in associates
Available-for-sale investments
Comair Limited
International Consolidated Airlines Group S.A.
The Airline Group Limited
11.50
0.01
16.68
Not owned directly by British Airways Plc
73
Airline operations
Airline operations
Air traffic control
holding company
South Africa
Spain
England
Glossary
Airline operations
This includes British Airways Plc, BA Cityflyer Limited, Flyline Tele Sales & Services GmbH,
OpenSkies SASU and British Midland Airways Limited.
Available seat kilometres (ASK)
The number of seats available for sale multiplied by the distance flown.
Available tonne kilometres (ATK)
The number of tonnes of capacity available for the carriage of revenue load (passenger and
cargo) multiplied by the distance flown.
Cargo tonne kilometres (CTK)

Continuing operations
Discontinued operations
EBITDAR
The number of revenue tonnes of cargo (freight and mail) carried multiplied by the distance flown.
The segments of the business that are considered to be normal, and expected to operate in the
foreseeable future.
A discontinued operation is a component of the entity that has been disposed of or is classified
as held for sale.
Earnings before interest, tax, depreciation, amortisation and aircraft rentals.
Exceptional items
Those items that in managements view need to be separately disclosed by virtue of their size or
incidence.
Gain on bargain purchase
The excess of fair value of net assets over the consideration paid.
JOLCO
Japanese operating lease with call option.
Load factor
The percentage relationship of revenue load carried to capacity available.
Manpower equivalent
Number of employees adjusted for part-time workers, overtime and contractors.
Merger
The combining of two or more entities through a purchase acquisition.
Merger effective date
21 January 2011, the date British Airways and Iberia signed a merger agreement to create
International Airlines Group.
Net debt
Loans, finance leases and hire purchase arrangements net of other current interest-bearing
deposits and cash and cash equivalents less overdrafts.
Net debt/total capital ratio
Net debt as a ratio of total capital.
nm
Not meaningful.
n/a
Not applicable.
Operating margin
Operating profit/(loss) as a percentage of revenue.
Overall load factor
RTK expressed as a percentage of ATK.
Passenger load factor
RPK expressed as a percentage of ASK.
EETC
This is the enhanced equipment trust certificate borrowing facility obtained in 2013 and secured
on related aircraft upon drawdown.
Punctuality
The industry's standard, measured as the percentage of flights departing within 15 minutes of
schedule.
Ready-to-go
The percentage of flights that have the aircraft door being closed three minutes prior to the
advertised scheduled departure time.
Regularity
The percentage of flights completed to flights scheduled, excluding flights cancelled for
commercial reasons.
Revenue passenger kilometres (RPK)
The number of revenue passengers carried multiplied by the distance flown.
Passenger revenue per ASK

Passenger revenue per RPK
Passenger revenue divided by ASK.

Passenger revenue divided by RPK.
Revenue tonne kilometres (RTK)
The revenue load in tonnes multiplied by the distance flown.
Total capital
Total equity plus net debt.
Total Group revenue per ASK
Total Group revenue divided by ASK.
Total traffic revenue per ASK
Revenue from total traffic divided by ASK.
Total traffic revenue per ATK
Revenue from total traffic divided by ATK.
74
Subsidiary undertakings of British Airways Plc at 31 December 2015

The holdings disclosed concern ordinary shares unless otherwise stated.
Name of company
Country of incorporation
BA and AA Holdings Limited

BA Call Centre India Private Limited (callBA)
BA Cityflyer Limited
BA European Limited
BA Healthcare Trust Limited
BA Number One Limited
BA Number Two Limited
Bealine plc
bmibaby Limited
BritAir Holdings Limited
British Airways (BA) Limited
British Airways 777 Leasing Limited
British Airways Associated Companies Limited
British Airways Avionic Engineering Limited
British Airways Capital Limited
British Airways Ejets Leasing Limited
British Airways Employee Benefits Trustees (Jersey) Limited
British Airways Finance (Jersey) Limited Partnership
British Airways Holdings BV
British Airways Holdings Limited
British Airways Holidays Limited
British Airways Interior Engineering Limited
British Airways Leasing Limited
British Airways Maintenance Cardiff Limited
British Airways Pension Trustees (No 2) Limited
British Airways Plc Employee Share Ownership Trust
British Mediterranean Airways Limited
British Midland Airways Limited
British Midland Limited
Deutsche BA Holding GmbH
Diamond Insurance Company Limited
Flyline Tele Sales & Services GmbH
Illiad Inc
OpenSkies SASU
Overseas Air Travel Limited
Speedbird Insurance Company Limited
Teleflight Limited
The Plimsoll Line Limited
England
India
England
England
England
England
Jersey
England
England
England
England
England
England
England
Jersey
Bermuda
Jersey
Jersey
Netherlands
Jersey
England
England
England
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2015 British Airways Annual Report PDF

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2015 British Airways Annual Report PDF

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British Airways Plc

Annual Report and Accounts

Year ended 31 December 2015

Company registration number: 1777777

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Strategic and directors reports

Directors responsibilities statement in relation to the financial statements

Independent auditors report

Group financial statements

British Airways Plc

Financial review; and

Principal risks and uncertainties.

To be the most admired airline

Invest in our product where it matters most

Strategic report continued

Deliver for our customers

Growing revenue with our airline partners

Grow our lead in London

Set the standard for safe, responsible aviation

Strategic report continued

Be outstanding perform at our best

Use technology to enhance customer engagement

Strategic report continued

Summary financial performance

Operating profit before exceptional items

Profit before tax

Profit after tax

Total traffic revenue

Strategic report continued

Total Group expenditure on operations*

Total Group expenditure excluding fuel*

*Stated before exceptional items.

Strategic report continued

Strategic report continued

Business and operational

Strategic report continued

Strategic report continued

Compliance and regulatory

resigned 7 January 2016

appointed 7 January 2016

Directors report continued

Internal control framework

Directors report continued

Directors responsibilities statement in relation to the financial statements

Select suitable accounting policies and then apply them consistently;

Directors responsibility statement pursuant to DTR 4

Approved by the Board and signed on its behalf by

British Airways Plc

Opinion on other matters prescribed by the Companies Act 2006

Debbie O'Hanlon (Senior statutory auditor)

Group consolidated income statement

Depreciation, amortisation and impairment

Aircraft operating lease costs

Engineering and other aircraft costs

Landing fees and en route charges

Handling charges, catering and other operating costs

Losses on fuel derivatives not qualifying for hedge accounting

Net financing charge relating to pensions

Net currency retranslation charges

Gain on disposal of property, plant and equipment and investments

Net gain relating to available-for-sale financial assets

Profit after tax